What are the four most common valuation multiples?

Answer hidden.



  • Funds attributable to all investors
  • Higher up on the income statement
  • Does not include impact of capital expenditures so could make sense to use for a company where D&A is only a small % of revenue


  • Higher Fixed costs
  • Makes sense to use where capex is a larger % of revenue and thus impacts the profitability of the company

Price / Earnings:

  • Earnings are the bottom line so takes into account D&A, interest, and tax expense
  • Just the funds attributable to shareholders. Government and debt holders have already been paid

EV / Sales:

  • If the company has negative EBITDA, not profitable yet, can be useful. Younger internet companies might be an example where it could make sense to use