Ideally, it's best to keep this ratio between 0.167 and 0.25.
If the price-to-sales ratio is 1, investors are paying $1 for every $1 of revenues generated by the company. A stock with a price-to-sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar's worth.
Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio.
For example, in the retail industry, a sell-through rate of 10% is considered good, while in the food industry, a sell-through rate of 20% is considered good. In ecommerce, a sell-through rate of 5% is considered average, while in the automotive industry, a sell-through rate of 2% is considered average.
General Advice on When to Sell Stocks for Profit
Target Achieved: Set a specific profit target – potentially 10-20% above your purchase price – and consider selling if the stock hits this mark.
Defining a good win rate depends on your company, niche market, and product. However, a rate of over 60% is considered a strong indicator that you have efficient and effective sales strategies. Some industries might have lower success rate expectations because of the size and complexity of the target market.
Debt to Equity Ratio
This key ratio is comparing the debt to the equity in the company. Warren Buffett prefers a company with a debt to equity ratio that is below . 5. In other words, for every $10 in equity the company should only have $5 in debt.
What is a good inventory turnover ratio? For most industries, a good inventory turnover ratio is between 5 and 10, which indicates that you sell and restock your inventory every 1-2 months. This ratio strikes a good balance between having enough inventory on hand and not having to reorder too frequently.
P/S ratio as of January 2025 (TTM): 9.41
According to Apple's latest financial reports and stock price the company's current price-to-sales ratio (TTM) is 64.6. At the end of 2024 the company had a P/S ratio of 8.86.
What is a good sales to equity ratio? There is no definitive answer as to what is a good sales to equity ratio. However, analysts generally like to see a high ratio as it is an indicator of efficient utilization of shareholders' equity to support sales and profit.
There's no fixed answer for what is a good EPS. When comparing companies, it's helpful to look closely at how EPS is trending and how it matches up to competitor earnings. Remember that a higher EPS can suggest growth and stock price increases.
While the ideal ratio depends on the company and industry, the P/S ratio is typically good when the value falls between one and two. A price-to-sales ratio with a value less than one is better.
To give you some sense of what the average for the market is, though, many value investors would refer to 20 to 25 as the average P/E ratio range. And again, like golf, the lower the P/E ratio a company has, the better an investment the metric is saying it is.
What should be the ideal price to sales ratio in your business? A PSR of less than 0.75 is extremely desirable for non-cyclical and technology firms, although equities with a PSR of 0.75-1.5 are regarded as strong buys. Those having a PSR greater than three are deemed high-risk.
The 90/10 rule in investing is a comment made by Warren Buffett regarding asset allocation. The rule stipulates investing 90% of one's investment capital toward low-cost stock-based index funds and the remainder 10% to short-term government bonds.
This investment strategy seeks total return through exposure to a diversified portfolio of primarily equity, and to a lesser extent, fixed income asset classes with a target allocation of 70% equities and 30% fixed income.
Warren Buffett, one of the world's most successful investors, has shared plenty of advice over his long career. But one piece of advice stands out as his top rule: “The first rule of investment is don't lose money.” And if you ask about the second rule?
Other warning signs might include lower profit margins than a company's peers, a falling dividend yield, and earnings growth below the industry average. There could be benign explanations for any of these, but a bit more research might uncover any red alerts that might result in future share weakness.
Despite his stock-picking prowess, Buffett is a strong advocate for simplicity in investing, particularly for the average investor. He has consistently recommended index funds as a straightforward and effective investment strategy.
Average sales close rates can vary pretty widely by industry. For instance, biotech has an average industry close ratio of 15%. The software industry has one of 22%, and the finance industry has one of 19%. However, the average close rate across industries is around 20%.
Winning 30 out of 100 is a 30% win rate. Most professional traders have a win rate near 50% or less. They are profitable because they make more on winning trades than they lose on losing trades.
What is the typical sales commission percentage? The industry average for sales commission typically falls between 20% and 30% of gross margins. At the low end, sales professionals may earn 5% of a sale, while straight commission structures allow a 100% commission.