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L Brands Inc Median P/S Value: 34.9 ( as of Jan13)

* All numbers are in millions except for per share data LTD 10-Y Financials »

Definition

Median P/S Value is calculated as follows:

Median P/S Value = Total Annual Sales / Shares Outstanding * 10YearMedianPS Ratio.

Explanation

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use Price/Sales Ratio instead of Price/Earnings Ratio or Price/Book Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

It also assumes that over time the profit margin is constant. If a company increases its profit margin to a sustainable level, this value might under-estimate its value. If it has permanent declined profit margins, this may over-estimate the company’s value.

Related Terms

Price/Sales Ratio, Price/Earnings Ratio, Price/Book Ratio, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number,GAVA
* All numbers are in millions except for per share data

L Brands Inc Annual Data

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L Brands Inc Quarterly Data

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