Sales Per Share

The magic formula:

Sales (usually pretty much the same thing as reported revenues, depending on how the company’s accountants choose to recognize sales as being revenues)…divided by the number of shares outstanding.

Like...if whatever.com has $100 million in sales and 25 million shares outstanding, then they have $4 a share in sales. Why ask? Well, it kinda helps you understand what you’re getting when you buy a share of stock. Like, if you’re paying $23 a share for whatever.com, you have maybe no debt and $6 a share in cash, and you get $4 a share in revenues, maybe 80 cents a share this year in earnings, $2 next and hopefully $4 the next. Very high growth company if they actually grow like this. And yeah, then they’ll be worth it, but wow...you’re paying $17 for $4 of sales for the equity of this company.

Worth it? Maybe.