Enterprise-Value-To-Revenue Multiple - EV/R

AAA

DEFINITION of 'Enterprise-Value-To-Revenue Multiple - EV/R'

A measure of the value of a stock that compares a company's enterprise value to its revenue. EV/R is one of several fundamental indicators that investors use to determine whether a stock is priced well. The EV/R multiple is also often used to determine a company's valuation in the case of a potential acquisition. Other valuation multiples that investors looking at EV/R would likely consider include EV/EBITDA, P/E and P/BV. EV/revenue is most commonly expressed as a number in decimal form followed by an x, as in 2.6x.

INVESTOPEDIA EXPLAINS 'Enterprise-Value-To-Revenue Multiple - EV/R'

Investors should compare EV/R for the company being analyzed to that of other public companies in the industry to get an idea of the company's relative financial health. For example, one electronics store's EV/R multiple should be compared to those of other electronics stores, not to those of food manufacturers or healthcare providers. This is true of any type of ratio analysis. Also, investors should always look at a variety of indicators, as no single indicator can provide an accurate picture of a company's performance.



RELATED TERMS
  1. EBIT/EV Multiple

    A financial ratio used to measure a company's return on investment. ...
  2. Enterprise Multiple

    A ratio used to determine the value of a company. The enterprise ...
  3. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  4. Multiple

    A term that measures some aspect of a company's financial well-being, ...
  5. Total Enterprise Value - TEV

    A valuation measurement used to compare companies with varying ...
  6. Price-To-Book Ratio - P/B Ratio

    A ratio used to compare a stock's market value to its book value. ...
Related Articles
  1. Using Enterprise Value To Compare Companies
    Fundamental Analysis

    Using Enterprise Value To Compare Companies

  2. How To Use Price-To-Sales Ratios To ...
    Markets

    How To Use Price-To-Sales Ratios To ...

  3. 4 Steps To Picking A Stock
    Options & Futures

    4 Steps To Picking A Stock

  4. Free Cash Flow Yield: The Best Fundamental ...
    Forex Education

    Free Cash Flow Yield: The Best Fundamental ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center