P/S = Market Capitalization / Revenue over past 12 months
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Let’s talk about Price to Sales Ratio. At the end of this very short video you’ll know what is Price to Sales Ratio, Why you should care about it, how it is calculated, When and How you can use it and What are its downsides and limitations. 
Investors use different investment strategies and different metrics to compare companies whose shares they intend to buy.  Price to Sales Ratio or PS Ratio is one of such metrics showing how much investors are willing to pay per dollar of sales for a stock. Or, in other words, how much the market values every dollar of the company's sales.
PS ratio equals the Market price of the stock divided by full year sales per share. Or in other words the Company’s Market capitalization divided by its revenue over the past 12 month.P/S = Market Capitalization / Revenue over past 12 months . It is Price-to-sales ratio.
The typical 12-month period used for sales in the price-to-sales ratio is generally the past four quarters, or the most recent or current fiscal year.PS ratios between 1 and 2 are generally considered good, and a PS ratio of less than 1 is considered excellent. Again, a ratio of less than 1 indicates that investors are paying less than $1 per $1 of the company's sales. Any number higher than 3 or 4 is considered unfavorable. Sounds easy, but the value of everything is in comparison. Watch this video till the very end to ensure you understand the downsides and limitations of this metric. If you find this video interesting or useful, please smash the like button below the video to support my project and encourage me to create more educational videos about finance and investing. 
A legit question you might ask now is: Why shouldn’t I use PE ratio instead? Price-Earnings ratio is a great and very useful metric. But there are industries in which you’ll be waiting for years till the company actually starts to  produce any earnings. And there are young, potentially high-growth companies, like a lot of tech startups not earning anything yet. Does it mean their stocks are worthless?


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Price to sales Ratio | How to evaluate a stock to buy
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