Sales Revenue/Enterprise Value
factor.formula
Sales-to-Enterprise Value Ratio = Last 12 Months Revenue (TTM) / Enterprise Value
This formula calculates the ratio of the company's operating income in the last 12 months to its enterprise value, which is used to measure the efficiency of the company's value creation. The specific meaning of each parameter in the formula is as follows:
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Refers to the total operating income of a company for the last 12 consecutive months. This data is usually obtained through financial statements and is calculated on a rolling basis to reflect the company's recent operating conditions. Using TTM data can eliminate seasonal fluctuations and provide a more stable reference.
- :
Refers to the total value owned by all investors in a company (including equity and debt investors), reflecting the theoretical cost of purchasing the entire company. The formula for calculating enterprise value is usually: Enterprise Value = Equity Market Value + Total Debt - Cash and Cash Equivalents.
factor.explanation
This factor measures the operating efficiency of enterprise value from the perspective of sales revenue, and is particularly suitable for valuing companies with weak profitability or unstable free cash flow. It reflects the sales revenue that investors can obtain for each unit of value they pay to purchase the entire enterprise, thereby helping investors evaluate the operating efficiency and value of the enterprise. A higher sales revenue/enterprise value ratio usually means that the enterprise value is underestimated or the company has stronger sales capabilities. Investors can use this indicator to make horizontal comparisons with other companies in the same industry to identify investment opportunities.