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American Capital Ltd (NAS:ACAS)
P/S Ratio
10.20 (As of Today)

As of today, American Capital Ltd's share price is $15.14. American Capital Ltd's Revenue per Share for the trailing twelve months (TTM) ended in Mar. 2014 was $1.50. Hence, American Capital Ltd's P/S Ratio for today is 10.20.

Warning Sign:

American Capital Ltd stock P/S Ratio (=10.10) is close to 10-year high of 10.4

ACAS' s 10-Year P/S Ratio Range
Min: 0.1   Max: 10.96
Current: 10.2

0.1
10.96

During the past 13 years, American Capital Ltd's highest P/S Ratio was 10.96. The lowest was 0.10. And the median was 6.14.

ACAS's P/S Ratiois ranked higher than
61% of the 1483 Companies
in the Global Asset Management industry.

( Industry Median: 7.56 vs. ACAS: 10.20 )

American Capital Ltd's Revenue per Share for the three months ended in Mar. 2014 was $0.30. Its Revenue per Share for the trailing twelve months (TTM) ended in Mar. 2014 was $1.50.

Warning Sign:

American Capital Ltd revenue has been in decline for the last 5 years.

During the past 12 months, the average Revenue per Share Growth Rate of American Capital Ltd was -22.70% per year. During the past 3 years, the average Revenue per Share Growth Rate was -4.00% per year. During the past 5 years, the average Revenue per Share Growth Rate was -10.40% per year. During the past 10 years, the average Revenue per Share Growth Rate was -11.20% per year.

During the past 13 years, American Capital Ltd's highest 3-Year average Revenue per Share Growth Rate was 117.90% per year. The lowest was 0.00% per year. And the median was 1.90% per year.


Definition

The P/S Ratio is another ratio widely used to value stocks. It was first used by Ken Fisher.

American Capital Ltd's P/S Ratio for today is calculated as

P/S Ratio=Share Price/Revenue per Share (TTM)
=15.14/1.5
=10.09

American Capital Ltd's Share Price of today is $15.14.
American Capital Ltd's Revenue per Share for the trailing twelve months (TTM) ended in Mar. 2014 was 0.42 (Jun. 2013 ) + 0.37 (Sep. 2013 ) + 0.41 (Dec. 2013 ) + 0.3 (Mar. 2014 ) = $1.50.

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

It can also be calculated from the numbers for the whole company:

P/E Ratio=Market Cap/Revenue

The revenue here is for the trailing 12 months.


Explanation

The P/S ratio is an excellent valuation indicator if you want to compare a stock with its historical valuation or with the stocks in the same industry. The P/S ratio works especially well when you want to compare the stock’s current valuation with its historical valuation. The P/S ratio is a great valuation tool for evaluating cyclical businesses where the P/E ratio works poorly. It works the best when comparing the current valuation with the historical valuation because over time, a company’s profit margin tends to revert to the mean.

When the P/S ratio is applied to the whole stock market, it can be used to evaluate the current market valuation and projected returns. In this case, the price is the total market cap of all stocks that are traded, and sales are the GDP of the country. This is how Warren Buffett estimates the broad market valuation and project future returns.

Similar to the Price/Earnings ratio and Price/Cash Flow or Price/Free Cash Flow, the P/E ratio measures the valuation based on the earning power of the company. This is where it is different from Price/Book ratio, which measures the valuation based on the company’s balance sheet.


Be Aware

The P/S ratio does not tell you how cheap or expensive the stock is. It cannot be used to compare companies in different industries. It works better for companies within the same industry because these companies tend to have similar capital structures and profit margins. It works the best when comparing a company with itself in the past.


Related Terms

Revenue per Share, Market Cap, Revenue, Median P/S Value, P/B Ratio, P/E Ratio


Historical Data

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

American Capital Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
ps 8.606.907.394.780.470.854.134.016.139.65

American Capital Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
ps 4.015.175.656.076.137.526.787.779.6510.53
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