investment-terminology

144 days ago, 0 views.

This is very basic but I tend to forgot, so this is my glossary of investment stuff to remember 🙂

TLDR;

Price-to-Earnings (P/E) ratio

The Price-to-Earnings ratio is tipically used as indicador of relative value between companies that are relatively mature and generally profitable.

It indicate how much potential investors currently have ot pay for each dollar of Earnings generated by the company.

Price-to-Sales (P/S) ratio

The Price-to-Sales Ratio (P/S Ratio) is a financial metric used to assess the valuation of a company in relation to its total revenues. It is calculated by dividing the market capitalization of a company (the total market value of all its outstanding shares) by its total revenues or sales.

In general, a lower P/S Ratio may suggest that a company is valued more attractively in relation to its revenues, while a higher P/S Ratio may indicate that the company is relatively overvalued compared to its sales.

Bibliography

Kiko Beats

Kiko Beats