Valuation Multiples Calculator
EV/EBITDA, P/E, P/B, P/S, and EV/Revenue in one view.
How valuation multiples are calculated
Valuation multiples compress a company's entire financial profile into a single number that can be compared quickly against peers, sector averages, or the company's own history — the basis of "comparable company" analysis. Enterprise value (EV) — market cap plus net debt — sits at the centre of the EV-based multiples, since it captures the value of the whole business regardless of how it's financed, unlike equity-only multiples such as P/E which can be skewed by leverage.
Using this calculator's defaults — a $2.5B market cap, $200M net debt, $400M EBITDA, $180M earnings, $800M book value, and $1.2B revenue — enterprise value is $2.5B + $200M = $2.7B, giving EV/EBITDA of $2.7B / $400M = 6.75× and EV/Revenue of $2.7B / $1.2B = 2.25×. The equity-based multiples are P/E = $2.5B / $180M ≈ 13.9×, P/B = $2.5B / $800M ≈ 3.1×, and P/S = $2.5B / $1.2B ≈ 2.1×. These pair well with the DuPont Analysis and Free Cash Flow calculators, which explain the profitability and cash generation behind the numbers these multiples are built from.
Frequently asked questions
- Why use EV multiples instead of just market cap ones?
- Enterprise value (market cap + net debt) reflects the whole capital structure, making EV/EBITDA and EV/Revenue better for comparing companies with different debt levels than price-based multiples like P/E.
- How do I compare against a sector median?
- This tool doesn't look up sector data automatically — compute the multiples here and compare them manually against public sector averages or a peer set you've gathered yourself.
- What are valuation multiples and why are they used?
- Valuation multiples express a company's value as a ratio to a financial metric (earnings, revenue, EBITDA, book value) so it can be compared quickly against peers or its own history — they're the basis of "comparable company" (comps) analysis, one of the most common valuation approaches used in practice.
- What is a typical EV/EBITDA multiple?
- Typical EV/EBITDA multiples for mature, listed companies cluster in the 8–12× range, though this varies widely by industry and growth profile — high-growth sectors like software often trade at 15×+, while slower-growth or cyclical industries may trade below 8×.
- What is the difference between EV-based and equity-based multiples?
- EV-based multiples (EV/EBITDA, EV/Revenue) use enterprise value — market cap plus net debt — so they capture the whole capital structure and are comparable across companies with different debt levels. Equity-based multiples (P/E, P/B) use only market cap, so they can be distorted by how much debt a company carries.
- What is EV/Revenue used for?
- EV/Revenue is most useful for valuing companies that aren't yet profitable (so P/E and EV/EBITDA aren't meaningful) — common for high-growth or early-stage companies where revenue is the most reliable metric available.
- How do I interpret a P/E ratio?
- The price-to-earnings ratio shows how many years of current earnings it would take to "pay back" the share price at today's earnings level — a P/E of 20 means the market is pricing the stock at 20× its trailing annual earnings. Higher P/E generally reflects higher expected future growth.
- What are the limitations of comparable multiples?
- Multiples are a snapshot, not a full valuation model — they don't explicitly account for differences in growth rates, margins, risk, or capital structure between companies, and can be distorted by one-off items in earnings or EBITDA. They work best alongside, not instead of, a discounted cash flow analysis.