Formulas: Price to sales [P/S]

A company’s price to sales ratio [P/S], is a valuation indicator which is calculated in a similar way to the P/E ratio. The P/S ratio isn’t quoted as often as the P/E ratio however, as it only take into account the price of the compnay’s stock against its annual sales. The P/S ratio reflects how much investors are paying for every dollar of the company’s sales, but it does not take into account the dollars the company paid to create those sales. Such costs... Read More

Formulas: Dividend payout ratio [DPR]

The Dividend Payout Ratio [DPR] or, more simply, the payout ratio, combines the answers from the earnings per share [EPS] ratio and the divdend yield ratio to calculatehow much of the company’s profits goes to paying dividends. Note that this formula has no use for companies that do not produce dividends. Despite being a less common calculation for many investors, it is a handy reference tool when investigating stocks. Understanding what percentage of a company’s net... Read More