# Sales per Share

## What it is:

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 it works (Example):

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 it Matters:

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.