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. Earnings Before Interest, Taxes, ...

    An indicator of a company's financial performance which is calculated ...
  3. Enterprise Value - EV

    A measure of a company's value, often used as an alternative ...
  4. Enterprise Multiple

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

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

    A term that measures some aspect of a company's financial well-being, ...
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. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center