Enterprise Value to Revenue Multiple

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

What is Enterprise Value to Revenue Multiple?

Enterprise Value to Revenue Multiple (EV/R) is a financial ratio used in company valuation that compares stock value of a company to its revenue for a given time period. EV/R is often used to evaluate a company before acquisition.

Enterprise Value to Revenue Multiple Formula

ƒ Sum(Enterprise Value) / Sum(Revenue)

How to calculate Enterprise Value to Revenue Multiple

If a company’s Enterprise Value (EV) is $50M and revenue is $35M, then the company’s EV/R Multiple is 1.4X.

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What is a good Enterprise Value to Revenue Multiple benchmark?

In general, a good EV/R Multiple is between 1x and 3x. However, public SaaS companies range between 6X and 12X EV/R.

Enterprise Value to Revenue Multiple benchmarks

Public SaaS EV/R Benchmark

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Finerva, 2021
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How to visualize Enterprise Value to Revenue Multiple?

The EV/R Multiple is usually expressed as a single number. For example, your EV/R might be 1.5X. The best way to visualize this metric is with a summary chart. Take a look at the example to see what your EV/R data might look like when you start to track it on a dashboard:

Enterprise Value to Revenue Multiple visualization example

Enterprise Value to Revenue Multiple

2X

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0.53

vs previous period

Summary Chart

Here's an example of how to visualize your current Enterprise Value to Revenue Multiple data in comparison to a previous time period or date range.
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Enterprise Value to Revenue Multiple

Chart

Measuring Enterprise Value to Revenue Multiple

More about Enterprise Value to Revenue Multiple

EV/R Multiple is used to value a company before a potential takeover, evaluate if the stock rice of a company is fair, and to compare companies in the same industry. It is calculated by dividing enterprise value by revenue and is usually expressed as a decimal number or multiple. This metric can be used to look at how well a company generates revenue and can be used even if the company is not yet profitable.

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