Enterprise value / EBITDA, price / earnings and enterprise value / sales are the most common multiples. Because comparable companies may have different growth, profitability and risk profiles, multiples may need to be adjusted.
Related terms
EBITDAEarnings before interest, tax, depreciation and amortisation; used as an indicator of the cash-like profitability generated by a company's core operations.ValuationEstimating the monetary value of a company, share, asset or liability at a specific date and for a specific purpose.Terminal valueIn a discounted cash flow model, the value expressing in a single amount all cash flows after the explicit forecast period.Completion accountsFinancial statements prepared as at the closing date of an acquisition, through which the final price is set by net debt and working capital adjustments.Cost of capitalThe minimum rate of return investors expect from an investment in return for the risk they take.Discounted cash flow (DCF)A valuation method based on discounting the free cash flows an asset or company will generate in the future to the present using an appropriate discount rate.
Last updated: October 22, 2026 · This definition is for general information only.