Deleveraging Enterprise Value/Sales Ratio
factor.formula
Deleveraged Enterprise Value/Sales Ratio =
Among them, the market value of net operating assets =
This factor is designed to measure the relationship between a company's value and sales revenue after deducting the impact of leverage.
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Refers to the total operating income accumulated over the last 12 months. This data can reflect the company's operating scale and sales capacity in the most recent year.
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Represents the market value of the core operating assets of an enterprise. It removes the impact of the enterprise's financial assets and financial liabilities by adjusting the market value, thereby better reflecting the value of the enterprise's actual operating assets. It is calculated as: market value + market value of financial liabilities - market value of financial assets.
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Refers to the total market value of stocks, usually calculated by multiplying the stock price by the total number of shares issued and outstanding, reflecting the market value of a company's equity.
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It refers to the market value of the financial liabilities undertaken by the enterprise, including bank loans, bonds, etc., which needs to be calculated using market prices or reasonable valuation methods rather than book value.
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It refers to the market value of financial assets held by an enterprise, including trading financial assets, available-for-sale financial assets, etc. It must be calculated using market prices or reasonable valuation methods rather than book value.
factor.explanation
This factor is an improved version of the price-to-sales ratio. It uses deleveraged enterprise value (i.e., the market value of net operating assets) instead of traditional market value to measure the relationship between enterprise value and sales revenue. The advantages of doing so are: 1) It eliminates the differences in valuations between companies with different leverage levels, making valuations more comparable; 2) It takes into account the market value of corporate debt and equity, reflecting the overall value of the company more comprehensively; 3) It eliminates the impact of financial activities, making valuations more focused on the value of the company's core operating assets. A higher deleveraged enterprise value/sales revenue ratio usually means that the company's value is higher relative to sales and may be overvalued by the market, and vice versa. Therefore, this factor is often used in value investment strategies to identify undervalued companies.