Valuation multiples are ratios used to estimate the value of a business by comparing it to similar companies. Common multiples include EV/EBITDA, EV/Revenue, and P/E. The right multiple depends on the industry, growth rate, and profitability of the business.
Definition
Understanding Valuation Multiples
Valuation multiples are ratios used to estimate the value of a business by comparing it to similar companies. Common multiples include EV/EBITDA, EV/Revenue, and P/E. The right multiple depends on the industry, growth rate, and profitability of the business.
Related Concepts
Related Terms
- Enterprise value
- EBITDA
- M&A
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