Enterprise-Value-to-Sales

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Enterprise-Value-to-Sales

A ratio of a company's enterprise value to its sales. The enterprise value is the theoretical price of a takeover and includes a wide variety of assets and liabilities, while sales is the value of the products the company sells in a given year. Generally speaking, a low ratio is considered better because it indicates that a company has high sales relative to its value. However, a high ratio may indicate that investors believe that its sales will soon rise.