1. What is TOPS?

TOPS (Takeover Price Score) is a financial metric that approximates the takeover price of a company. It calculates the ratio of market capitalization (Outstanding Shares × Price) to sales revenue.

2. How Does the Calculator Work?

The calculator uses the TOPS formula:

Where:

• Outstanding Shares — Total number of shares currently held by all shareholders
• Price — Current market price per share
• Sales — Total sales revenue of the company

Explanation: The formula calculates how much the market values each unit of sales, which can indicate potential takeover valuation.

3. Importance of TOPS Calculation

Details: TOPS provides an approximate measure of takeover price relative to sales. It's useful for investors analyzing potential acquisition targets and comparing valuation metrics across companies in the same industry.

4. Using the Calculator

Tips: Enter the number of outstanding shares, current share price, and total sales revenue. All values must be positive numbers. The result represents the takeover price score.

5. Frequently Asked Questions (FAQ)

Q1: What does a high TOPS value indicate?
A: A high TOPS value suggests the market values the company's sales highly, which could indicate strong growth potential or premium market positioning.

Q2: How does TOPS differ from P/S ratio?
A: While similar, TOPS specifically focuses on takeover valuation context, whereas P/S ratio is a general valuation metric comparing market cap to sales.

Q3: What are typical TOPS values across industries?
A: TOPS values vary significantly by industry. Technology companies often have higher TOPS values than traditional manufacturing companies due to growth expectations.

Q4: What are the limitations of TOPS?
A: TOPS doesn't account for debt, profitability, or growth rates. It should be used alongside other financial metrics for comprehensive analysis.

Q5: Can TOPS be negative?
A: No, since all inputs (shares, price, sales) must be positive values, TOPS will always be a positive number.