P/S ratio analysis.

Price-to-Sales (P/S) ratio = market cap / total revenue (or share price / revenue per share). Useful when companies have no earnings (early-stage, restructuring) where P/E breaks down. Below 1.0 = potentially undervalued (or low-margin business). 1-3 = reasonable. 3-10 = premium. 10+ = high-growth or speculative.

Example: company 50 share price, 20 revenue per share. P/S = 2.5x. Means investors paying 2.50 for every 1 of annual revenue. Compare against industry median - software P/S typically 5-15x, retail 0.5-2x. Same P/S ratio means very different things across industries.

P/S strengths: works for unprofitable companies (where P/E gives nonsense), harder to manipulate than earnings, more stable than P/E across cycles. Weaknesses: ignores profitability (high-revenue/zero-margin companies look cheap), ignores debt, doesn't capture quality. Best for cross-time comparison (same company over years) and within-industry comparison. Combine with P/E and EV/EBITDA for full picture.

A worked example

Try the defaults: share price of 50, revenue per share of 20, or: total market cap of 0, or: total annual revenue of 0. The tool returns 2.50x. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Share Price (£), Revenue Per Share (£), OR: Total Market Cap (£), and OR: Total Annual Revenue (£). Frequency and unit price pull the total in different directions. The biggest surprise for most people is how small recurring amounts compound into large annual figures — that's where this calculation earns its keep.

The formula behind this

P/S = market cap / revenue (or share price / revenue per share). Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.