The P/S ratio is defined as price per share divided by sales per share. Given price per share is $30 and sales per share is $2, which statement is true?

• A. The P/S ratio is 60
• B. The P/S ratio is 15
• C. The P/S ratio cannot be determined
• D. The P/S ratio is 0

Answer: (B)

The P/S ratio shows how much investors pay for each dollar of a company’s sales, by comparing price per share to sales per share. With a price per share of 30 and sales per share of 2, the ratio is 30 divided by 2, which equals 15. So the statement that the P/S ratio is 15 is true.

Why the other options don’t fit: 60 would require sales per share to be 0.5 (30 divided by 0.5), which isn’t the given data. 0 would imply either zero price or infinite sales per share, which isn’t the case here. Cannot be determined would only apply if information were missing, but both inputs are provided.