Sales-to-Market Capitalization Ratio
factor.formula
Operating income to market value ratio:
The formula calculates the operating income to market value ratio and is explained below:
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Refers to the total operating income of the company in the most recent 12 months (Trailing Twelve Months Sales). Operating income is the income earned by a company through the sale of goods or provision of services in normal business activities, and is generally considered an important indicator for measuring a company's business scale and market share.
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Refers to the total value of all issued shares of a company calculated at the current market price. The calculation method is: total market value = current stock price * number of issued shares. The total market value reflects the market's assessment of the company's overall value.
factor.explanation
The revenue-to-market ratio is the inverse of the price-to-sales ratio, which measures the market's assessment of a company's value based on its revenue in the most recent 12 months. Compared with net profit, revenue is more difficult to manipulate and less volatile, so it can provide a more robust valuation reference when evaluating growth companies or companies with weaker profitability. When the revenue-to-market ratio is higher, it indicates that investors can buy more revenue with relatively less money, so the stock may be undervalued. Investors should consider the industry average and the company's specific situation.