EV/Sales is useful for companies that aren’t yet profitable, such as young software firms. Typical values range from below 1× for retailers to 10× or more for fast-growing software companies.
How to use the EV to Sales Calculator
- Market capitalisation
- Total debt
- Preferred shares
- Minority interest
- Cash and cash equivalents
- Sales (revenue)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter market capitalisation, debt, preferred shares, minority interest, cash and annual sales.
Tips
- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.
Common mistakes to avoid
- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.
Inputs explained
| Field | What to enter |
|---|---|
| Market capitalisation | Amount in your currency |
| Total debt | Amount in your currency |
| Preferred shares | Amount in your currency |
| Minority interest | Amount in your currency |
| Cash and cash equivalents | Amount in your currency |
| Sales (revenue) | Amount in your currency |
What each result means
- Enterprise value = [Market capitalisation] + [Total debt] + [Preferred shares] + [Minority interest] – [Cash and cash equivalents]
- EV to sales = [Enterprise value]÷[Sales (revenue)]
Example values
How the main result changes when Market capitalisation changes and everything else stays at the example values above:
| Market capitalisation | EV to sales (×) |
|---|---|
| 2,500,000,000 | 1.17 |
| 3,750,000,000 | 1.58 |
| 5,000,000,000 | 2 |
| 6,250,000,000 | 2.42 |
| 7,500,000,000 | 2.83 |
| 10,000,000,000 | 3.67 |
Formula
EV = market cap + debt + preferred + minority interest − cashEV/Sales = EV ÷ revenueWorked example
Inputs — Market capitalisation: $5,000,000,000; Total debt: $1,500,000,000; Preferred shares: $0; Minority interest: $100,000,000; Cash and cash equivalents: $600,000,000; Sales (revenue): $3,000,000,000.
Results — Enterprise value = $6,000,000,000.00; EV to sales = 2 ×.
Frequently asked questions
What is a good EV/Sales ratio?
It depends on margins and growth; 1–3× is common for mature companies.
Why use EV/Sales instead of P/S?
EV/Sales accounts for debt and cash.
When is EV/Sales most useful?
For companies with little or no profit.
What formula does the EV to Sales Calculator use?
EV = market cap + debt + preferred + minority interest − cash.