# Forward PS Ratio

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## Definition

Forward Price to Sales Ratio is the current stock price over the predicted sales per share. While similar to the price to sales ratio, this is a forward looking estimate of a company's sales.

A forward P/S ratio that is higher than the current P/S ratio means that that sales are expected to decrease at the next period. If you think of P/S Ratio as "how much am I paying for each dollar of sales?" a forward P/S ratio can be thought of as "is my current P/S Ratio justified if sales will change drastically?"

Let's say you purchase a company with a P/S Ratio of 10. Intuitively, this means that for each dollar of sales, you're paying ten dollars for that stake. If the Forward P/S Ratio is 15, this could mean that sales are expected to significantly drop and you could be hypothetically paying 15 dollars per dollar of shares instead of 10!

## Formula

Forward Price to Sales is calculated as the current stock price over the expected sales per share of the next period.

If a stock is 600 dollars, the last reporting period's sales per share was 50, and the forward estimate sales was 100, your forward P/S would be 6. (600/100). Your current forward PS ratio would be 12. (600/50).

Note : We do not display negative PS ratios.

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