Sales per Share
What is Sales per Share?
The term sales per share represents the portion of a company's that is allocated to each share of common stock. The figure can be calculated simply by dividing sales earned in a given reporting period (usually quarterly or annually) by the total number of shares outstanding during the same term. Because the number of shares outstanding can fluctuate, a weighted average is typically used.
The formula for sales per share is:
Sales Per Share = (Sales- Discounts and Returns)/Shares Outstanding
How Does Sales per Share Work?
Let's assume that during the fourth quarter, Company XYZ had shares outstanding. In this particular case, the company's quarterly sales per share would be $0.35, calculated as follows:
($4 million - $500,000)/10 million = $0.35
Why Does Sales per Share Matter?
Sales per share is a barometer to gauge a company's accounting changes and restatements.