Sales per Share
What it is:
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 it works (Example):
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:of $4 million and discounts and returns of $500,000. During the same time frame, the company had 10 million
($4 million - $500,000)/10 million= $0.35
Why it Matters:
Sales per share is a barometer to gauge a company's accounting changes and restatements.