Sales per Share

Written By
Paul Tracy
Updated November 4, 2020

What is Sales per Share?

The term sales per share represents the portion of a company's revenue 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 sales of $4 million and discounts and returns of $500,000. During the same time frame, the company had 10 million 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 shares = $0.35

Why Does Sales per Share Matter?

Sales per share is a barometer to gauge a company's productivity per unit of shareholder ownership. As such, even though earnings per share is a key driver of share prices, many analysts look to revenue per share as a "check" on the reasonableness of a company's valuation. It's important to remember, however, that revenues can often be susceptible to manipulation, accounting changes and restatements.
 

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Sales per Share.
Be the first to ask a question

If you have a question about Sales per Share, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Sales per Share, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Sales per Share

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms