1. What is TOS?

TOS (Turnover on Sales) is a financial ratio that calculates the relationship between a company's market capitalization and its sales revenue. It provides insight into how efficiently a company is generating sales relative to its market value.

2. How Does the Calculator Work?

The calculator uses the TOS formula:

Where:

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

Explanation: The formula calculates how many times the company's market value (outstanding shares × price) is covered by its sales revenue.

3. Importance of TOS Calculation

Details: TOS helps investors assess a company's valuation relative to its sales performance. A lower ratio may indicate undervaluation, while a higher ratio may suggest overvaluation relative to sales.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is a good TOS ratio?
A: There's no universal "good" TOS ratio as it varies by industry. Generally, lower ratios may indicate better value, but should be compared with industry peers.

Q2: How does TOS differ from P/S ratio?
A: TOS is essentially the inverse of the Price-to-Sales (P/S) ratio. While P/S shows how much investors pay per dollar of sales, TOS shows how sales cover the market capitalization.

Q3: When should TOS be used?
A: TOS is particularly useful when comparing companies within the same industry or when analyzing companies with inconsistent earnings but stable sales.

Q4: What are the limitations of TOS?
A: TOS doesn't account for debt, profitability, or differences in accounting methods. It should be used alongside other financial metrics for comprehensive analysis.

Q5: Can TOS be negative?
A: No, since all inputs (shares, price, and sales) should be positive values, TOS will always be a positive ratio.