Calculating your price to sales ratio is straightforward once you know the Price to Sales (P/S) Ratio formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Price to Sales (P/S) Ratio Calculator.
What is Price to Sales (P/S) Ratio?
The Price to Sales (P/S) Ratio calculation tells you your price to sales ratio from a few simple inputs. The figure you are solving for here is the price to sales ratio.
The Price to Sales (P/S) Ratio formula
The core formula is:
Price to sales ratio = Market capitalisation ÷ Annual revenueHere is what each input means:
- Market capitalisation — a money amount. Example: ₹10,00,000.
- Annual revenue — a money amount. Example: ₹2,50,000.
How to calculate it step by step
- Write down the market capitalisation (for example, ₹10,00,000).
- Write down the annual revenue (for example, ₹2,50,000).
- Apply the formula above to get your price to sales ratio.
- Double-check the result with the Price to Sales (P/S) Ratio Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Market capitalisation | ₹10,00,000 |
| Annual revenue | ₹2,50,000 |
| Price to sales ratio | 4.00 |
With market capitalisation of ₹10,00,000 and annual revenue of ₹2,50,000, the price to sales ratio works out to 4.00.
Example 2
With market capitalisation of ₹20,00,000 and annual revenue of ₹2,50,000, the price to sales ratio works out to 8.00.
| Result | Value |
|---|---|
| Price to sales ratio | 8.00 |
Example 3
With market capitalisation of ₹5,00,000 and annual revenue of ₹2,50,000, the price to sales ratio works out to 2.00.
| Result | Value |
|---|---|
| Price to sales ratio | 2.00 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
Prefer not to do the maths by hand? — the Price to Sales (P/S) Ratio Calculator does it instantly, for free, with the formula and a worked example built in.
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