EV/Revenue

A company’s Enterprise Value to Revenue multiple divides its Enterprise Value (cf.) by its total revenues. Along with other multiples such as EV/EBITDA (cf.), the EV/Revenue multiple is useful to evaluate the multiple required to acquire a company. A low multiple infers a relatively cheap acquisition opportunity compared to a high multiple, other things being equal. EV/Revenue is preferred over EV/EBITDA for loss-making early-stage or growth companies.