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Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market capitalization by the revenue in the most recent year; or, equivalently, divide the per-share price by the per-share revenue. The justified P/S ratio is calculated as the price-to-sales ratio based on the Gordon Growth Model.
Valuation using multiples. In economics, valuation using multiples, or "relative valuation", is a process that consists of: identifying comparable assets (the peer group) and obtaining market values for these assets. converting these market values into standardized values relative to a key statistic, since the absolute prices cannot be compared.
The Dorfman–Steiner theorem (or Dorfman–Steiner condition) is a neoclassical economics theorem which looks for the optimal level of advertising that a firm should undertake. The theorem is named after Robert Dorfman and Peter O. Steiner who developed the approach in their widely cited 1954 article in the American Economic Review.
A good's price elasticity of demand ( , PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good ( law of demand ), but it falls more for some than for others. The price elasticity gives the percentage change in quantity demanded when there is a one percent ...
Business and economics portal. v. t. e. In economics, a price system is a system through which the valuations of any forms of property (tangible or intangible) are determined. All societies use price systems in the allocation and exchange of resources as a consequence of scarcity. [ 1] Even in a barter system with no money, price systems are ...
Pythagorean tuning is a system of musical tuning in which the frequency ratios of all intervals are based on the ratio 3:2. [2] This ratio, also known as the " pure " perfect fifth, is chosen because it is one of the most consonant and easiest to tune by ear and because of importance attributed to the integer 3.
Newsvendor model. The newsvendor (or newsboy or single-period[ 1] or salvageable) model is a mathematical model in operations management and applied economics used to determine optimal inventory levels. It is (typically) characterized by fixed prices and uncertain demand for a perishable product. If the inventory level is , each unit of demand ...
Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Here various valuation techniques are used by financial market participants to determine the price they are willing to pay or receive to effect a sale of the business. In addition to estimating the selling price of a ...