Understanding EV/S
Relates the value of the operating business to sales. Similar sales multiples can conceal very different profitability and reinvestment needs.
EV/S = Enterprise value / revenue5,111,344,070,400 ÷ 466,823,000,000 ≈ 10.95x
What does the historical comparison mean?
The cheap/expensive label compares the current multiple with the supplied three-year median. It is a comparison with this company’s own history, not with every stock in its industry. A lower multiple can also reflect weaker growth or greater risk.
Why can forward multiples look different?
A forward multiple uses an estimated future financial measure instead of the trailing figure. A lower forward ratio may reflect expected improvement, but that improvement is not yet a reported result. Read the forecast period and assumptions before comparing it with the current multiple.