Definition

EV/Sales

Enterprise value divided by revenue — the multiple of last resort when earnings are negative or immature, and the standard lens for high-growth companies. Because a dollar of revenue is only worth what it eventually converts to profit, the multiple is really a compressed expectation of future margins. Enterprise value requires a market price and arrives with the licensed market-data feed; the revenue input comes from the filing.

Formula

EV/Sales = (Market cap + Total debt − Cash) ÷ Revenue

Drivers — what actually moves it

Expected margin trajectory: the dominant driver — the multiple embeds where operating margin lands at maturity.
Expected growth: faster durable revenue growth supports a higher multiple.
Capital intensity: how much investment each incremental revenue dollar requires.
Risk / rates: the discount applied to profits that are mostly in the future.

Where to find it in the filing

Income statement (revenue); balance sheet (net debt); market cap is market data. 10-K Item 8 — revenue is the top line; debt and cash on the balance sheet.

XBRL concepts Echelon grounds to: Revenues · RevenueFromContractWithCustomerExcludingAssessedTax · LongTermDebtNoncurrent · CashAndCashEquivalentsAtCarryingValue

Sector caveats — where this breaks

Comparing EV/Sales across businesses with structurally different margin ceilings is a category error — a software revenue dollar and a grocery revenue dollar are not the same asset.

EV/EBITDA P/E ratio Gross margin Enterprise value

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.