Price Multiple

Filed Under: , ,
Dictionary Says

Definition of 'Price Multiple'


Any ratio that uses the share price of a company in conjunction with some specific per-share financial metric in order to evaluate a company's financial situation. The share price is typically divided by a chosen per-share metric to form a ratio.



Price Multiple
Investopedia Says

Investopedia explains 'Price Multiple'


Some common price multiples are the price-to-earnings (P/E) ratio, the price-to-book (P/B) ratio, and the price-to-sales (P/S) ratio. These ratios are used in conjunction with other fundamental metrics, such as EBIDTA, in order to give analysts and investors a quick initial impression of whether a company would make a good viable investment. However, because these multiples are very simplistic, they should not be the only measure of assessing a potential investment.

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. IPO ETF

    An exchange-traded fund that focuses on stocks that have recently held an initial public offering (IPO). The underlying indexes tracked by IPO ETFs vary from one fund manager to another, but index IPO ETFs are usually passively managed and contain equities that have recently been offered to the public.
Trading Center