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Price-to-Sales Ratio - P/S Ratio

In case of a negative price-to-earnings ratio it can not be used as a key performance figure and therefore an alternative figure needs to be calculated. In this case the price-to-sales ratio can be used. Companies that have just been started very often do not generate any earnings and profits yet. Also in these cases the price-to-sales ratio can be used as an alternative key performance figure for any kind of fundamental analysis.