# Multiple

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## Definition of 'Multiple'

In finance, a multiple is a number that is used to compare the value of one thing to the value of another. For example, a price-to-earnings ratio is a multiple that compares the price of a stock to its earnings per share.

There are many different types of multiples, and they are used for a variety of purposes. Some of the most common types of multiples include:

* Price-to-earnings ratio (P/E ratio): This is the ratio of a company's stock price to its earnings per share.

* Price-to-book ratio (P/B ratio): This is the ratio of a company's stock price to its book value per share.

* Enterprise value-to-EBITDA ratio (EV/EBITDA ratio): This is the ratio of a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Multiples can be used to compare companies within the same industry, or to compare companies across different industries. They can also be used to value companies, or to make investment decisions.

It is important to note that multiples are not perfect. They can be influenced by a variety of factors, including the current market conditions and the financial health of the company. As a result, it is important to use multiples with caution and to consider other factors when making investment decisions.

In addition to the types of multiples listed above, there are a number of other types of multiples that are used in finance. Some of the more common types of multiples include:

* Dividend yield: This is the ratio of a company's dividend per share to its stock price.

* Cash flow yield: This is the ratio of a company's cash flow per share to its stock price.

* Return on equity (ROE): This is a measure of a company's profitability, calculated as net income divided by shareholders' equity.

* Return on assets (ROA): This is a measure of a company's profitability, calculated as net income divided by total assets.

These are just a few of the many types of multiples that are used in finance. Multiples can be a useful tool for comparing companies and making investment decisions, but it is important to use them with caution and to consider other factors as well.

There are many different types of multiples, and they are used for a variety of purposes. Some of the most common types of multiples include:

* Price-to-earnings ratio (P/E ratio): This is the ratio of a company's stock price to its earnings per share.

* Price-to-book ratio (P/B ratio): This is the ratio of a company's stock price to its book value per share.

* Enterprise value-to-EBITDA ratio (EV/EBITDA ratio): This is the ratio of a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Multiples can be used to compare companies within the same industry, or to compare companies across different industries. They can also be used to value companies, or to make investment decisions.

It is important to note that multiples are not perfect. They can be influenced by a variety of factors, including the current market conditions and the financial health of the company. As a result, it is important to use multiples with caution and to consider other factors when making investment decisions.

In addition to the types of multiples listed above, there are a number of other types of multiples that are used in finance. Some of the more common types of multiples include:

* Dividend yield: This is the ratio of a company's dividend per share to its stock price.

* Cash flow yield: This is the ratio of a company's cash flow per share to its stock price.

* Return on equity (ROE): This is a measure of a company's profitability, calculated as net income divided by shareholders' equity.

* Return on assets (ROA): This is a measure of a company's profitability, calculated as net income divided by total assets.

These are just a few of the many types of multiples that are used in finance. Multiples can be a useful tool for comparing companies and making investment decisions, but it is important to use them with caution and to consider other factors as well.

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Copyright © 2004-2023, MyPivots. All rights reserved.