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Rio Tinto PLC (NYSE:RIO)
Median P/S Value
$69.70 (As of Today)

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

Median P/S Value is calculated as trailing twelve months (TTM) revenue per share times 10-Year median P/S ratio. Rio Tinto PLC's revenue per share for the trailing twelve months (TTM) ended in Dec. 2013 was $27.55. Rio Tinto PLC's 10-Year median P/S ratio is 2.53. Therefore, the Median P/S Value for today is $69.70.

As of today, Rio Tinto PLC's share price is $56.45. Rio Tinto PLC's median P/S value is $69.70. Therefore, Rio Tinto PLC's Price to Median P/S Value Ratio for today is 0.80.

RIO' s 10-Year Price to Median P/S Value Range
Min: 0.26   Max: 5.62
Current: 0.8

0.26
5.62

During the past 13 years, the highest Price to Median P/S Value Ratio of Rio Tinto PLC was 5.62. The lowest was 0.26. And the median was 1.25.

RIO's Price to Median P/S Value is ranked higher than
91% of the 2632 Companies
in the Global Industrial Metals & Minerals industry.

( Industry Median: 9999.00 vs. RIO: 0.80 )

Definition

Rio Tinto PLC's Median P/S Value for today is calculated as

Median P/S Value=Total Annual Sales / Shares Outstanding*10-Year Median P/S Ratio
=Revenue per Share (TTM)*10-Year Median P/S Ratio
=27.55*2.53
=69.70

10-Year Median P/S Ratio is 2.53.
For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Rio Tinto PLC's revenue per share for the trailing twelve months (TTM) ended in Dec. 2013 was $27.55.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


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 P/S Ratio instead of P/E Ratio or P/B 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.

Rio Tinto PLC's Price to Median P/S Value Ratio for today is calculated as

Price to Median P/S Value=Share Price/Median P/S Value
=56.45/69.70
=0.81

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Intrinsic Value (DCF Projected), Intrinsic Value (DCF), Intrinsic Value (DE), Graham Number, GAVA


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Rio Tinto PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
medpsvalue 23.7335.1942.4558.1987.0359.8170.7679.1169.7069.70

Rio Tinto PLC Semi-Annual Data

Jun09Dec09Jun10Dec10Jun11Dec11Jun12Dec12Jun13Dec13
medpsvalue 74.2959.810.0070.760.0079.110.0069.700.0069.70
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