Explained: EV to sales ratio
Explained: EV to sales ratio

Explained: EV to sales ratio

EV to sales ratio is one of the simplest multiples for valuation purposes. During the process of mergers and acquisitions, the ratio gives all parties a good idea.

DSIJ Intelligence Article rating: 4.3

Enterprise value-to-sales (EV/sales) is a financial ratio measuring the company’s total value (in enterprise value terms) to its total sales revenue. To simplify more, it is EV per dollar of sales. This means that the higher the ratio, the more ‘expensive’ or valuable the company is, and vice versa. The ratio is used for financial analysis and valuation strategies while doing research for a potential investment. 

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