According to @QCompounding, the Price-to-Sales (P/S) ratio is calculated by dividing a stock's share price by its revenue per share, offering insights into how the market values a company's sales. For traders, monitoring the P/S ratio can help identify undervalued or overvalued stocks, which is vital for portfolio allocation and risk management. Changes in equity valuations, especially in tech and growth sectors, often impact sentiment in the crypto market, as investors shift capital between asset classes based on perceived value and risk (source: @QCompounding).

According to Compounding Quality, understanding the main types of financial ratios—liquidity, profitability, leverage, efficiency, and market value ratios—is crucial for crypto and stock traders. These ratios help traders evaluate a company's financial health, risk profile, and growth potential, which can directly impact crypto market sentiment when traditional stocks with strong ratios attract institutional investment or trigger cross-market flows (source: Compounding Quality, Twitter, May 16, 2025). Monitoring these financial ratios allows traders to identify trends, make informed buy or sell decisions, and anticipate how shifts in equity markets may influence major cryptocurrencies through correlated asset movements.