High price/sales multiples often go with high profit margins.

Question

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High price/sales multiples indicate that investors are willing to pay more for each dollar of sales, which is often a sign of high growth potential and strong earnings. Companies with high profit margins also tend to be more valuable to investors, as they generate more profits for each dollar of sales. Therefore, it is common for high price/sales multiples to be associated with high profit margins.

High Price/sales Multiples Often Go with High Profit Margins