The Price/sales Multiple Is Typically Only Used for the Valuation

question 89

True/False

The price/sales multiple is typically only used for the valuation of firms without earnings.

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Definitions:

Liabilities

Financial obligations or debts owed by a business to external parties or entities.

Retained Earnings

The portion of net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Equity

The value of ownership interest in a firm, calculated as the difference between assets and liabilities on a company’s balance sheet.

Dividends

Payments made by a corporation to its shareholders, often derived from profits, on a per-share basis.