Sales-to-Enterprise Value Ratio (S/EV)
factor.formula
Sales/Enterprise Value Ratio (S/EV) = Last 12 Months Operating Revenue (TTM) / Enterprise Value
The formula calculates the ratio of the last twelve months' operating income to the enterprise value, as follows:
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Refers to the company's total operating income in the past 12 consecutive months. It uses TTM (Trailing Twelve Months) rolling calculation to avoid the deviation caused by the accounting cycle and can reflect the company's revenue status more timely and accurately. This data is usually taken from the company's financial statements (such as the income statement) and is the sum of the company's main business income. It reflects the business scale and market performance of the company over a period of time.
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Refers to the value owned by all investors of a company (including equity and debt investors), which reflects the valuation of the company's overall assets. It is usually calculated as follows: Enterprise Value = Company Market Value + Total Debt - Cash and Cash Equivalents. This indicator takes the impact of debt financing into account from the perspective of the entire enterprise and better reflects the true value of the enterprise.
factor.explanation
The sales revenue/enterprise value ratio (S/EV) measures the operating income generated by each unit of enterprise value from the perspective of sales revenue, reflecting the operating efficiency of the overall value of the enterprise. When the ratio is high, it indicates that the enterprise can create more sales revenue with less enterprise value, which is generally considered to be a relatively good performance. This indicator is particularly suitable for evaluating companies that have not yet made a profit but have a certain scale and sales revenue, providing a comparable value assessment standard for these companies.