Price-to-sales ratio
The price-to-sales ratio (KUV) is a share ratio . It sets the current market capitalization of a company in relation to its (annual) turnover . The term is related to the price-earnings ratio (P / E ratio), which looks at the company's price-to-earnings ratio .
The KUV can be a more suitable evaluation criterion than the P / E ratio for companies with cyclically fluctuating return on sales . In turnaround situations and for young companies that are still in the phase of start-up losses, it can provide a meaningful statement in contrast to the P / E ratio.
Usually, however, the P / E ratio is more meaningful because the KUV ignores the profitability of the company. For example, a share with KUV 2 is cheaper than a share with KUV 1 if the first company is able to generate a return on sales that is more than twice as high in the long term.
At the time of the new economy boom, KUVs were used to justify the exorbitantly high valuations of often unprofitable companies. After this speculative bubble burst , the KUV lost its popularity as a key figure. But it is still a central criterion in the stock valuation of the popular "stock exchange pastor" Uwe Lang .