Progressive Care Inc (RXMD)

[red13]

Weird, I didn't say sales and stock price were correlated. I wrote that valuation and stock price are correlated. Stock price is part of the formula for calculating valuation, therefore it must be correlated.

Market valuation = stock price times number of issued shares.

That's it. There is nothing else to figure. Now if you talk about valuation for a takeover, lots of other things come into play. However, once a price has been set for the company, you go back and apply the formula above for figuring the price to sales ratio, which is a different formula but one that involves nothing above 3rd grade arithmetic.

A company with no sales, and 100 million shares issued trading at $1 would have a market value of $100 million, irrespective of sales. Sales would then be used to figure the PSR. In this case a negative number and the stock would be wildly overpriced.