Price/Sales ratio (P/S)

P/S compares market cap to revenue. It works even for firms with no (sustainable) profit yet — hence popular for growth stocks. Example: Market cap $10bn, revenue $2bn → P/S = 5. The market pays $5 for every $1 of sales. Watch out: A low revenue multiple is worthless if the company can't turn revenue into profit. Always read together with margins (gross, net).