EV/Sales Ratio Calculator
Calculate Enterprise Value to Sales (EV/Sales) ratio.
Enter market cap, debt, cash, and annual revenue to value a company relative to its revenue.
Enterprise Value to Sales (EV/Sales or EV/Revenue)
The EV/Sales ratio compares a company’s total enterprise value to its annual revenue. Unlike the Price-to-Sales (P/S) ratio, EV/Sales accounts for a company’s debt and cash, giving a cleaner picture of the true business value relative to its revenue.
Formula:
Enterprise Value = Market Capitalization + Total Debt - Cash and Cash Equivalents
EV/Sales = Enterprise Value / Annual Revenue
Why use EV instead of market cap?
Two companies can have the same market cap but very different levels of debt. A company with $1B in debt and a $500M market cap has an enterprise value of $1.5B — an acquirer would have to take on that debt. EV/Sales captures this.
Interpretation by industry:
| Industry | Typical EV/Sales |
|---|---|
| Grocery / Retail | 0.2 – 0.8x |
| Manufacturing | 0.5 – 2.0x |
| Healthcare | 2 – 6x |
| Software / SaaS | 4 – 15x |
| High-growth tech | 10 – 30x+ |
EV/Sales vs P/S:
- P/S is simpler and uses only market cap and revenue
- EV/Sales is more accurate for comparing companies with different capital structures
- For debt-free companies with little cash, both give similar results
How to interpret:
- Low EV/Sales: cheap relative to revenue — but check margin quality
- High EV/Sales: market expects strong growth or premium margins
- Always compare within the same industry
Example:
- Market cap: $2B, Debt: $500M, Cash: $200M, Revenue: $800M
- EV = $2B + $500M - $200M = $2.3B
- EV/Sales = $2.3B / $0.8B = 2.88x
High-margin businesses justify higher multiples. A SaaS company at 10x EV/Sales may be cheaper than a retailer at 1x if margins differ dramatically.