## What are the multiples for valuation?

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In practice, the EV/EBITDA multiple is the most commonly used, followed by EV/EBIT, especially in the context of M&A. The P/E ratio is typically used by retail investors, while P/B ratios are used far less often and normally only seen when valuing financial institutions (i.e. banks).

## What are typical EBITDA multiples?

Nevertheless, when valuing a business, it is essential to consider the effect on EBITDA multiples of the industry in which the business operates.” For most businesses with EBITDA of $1,000,000 – $10,000,000, the EBITDA multiple will be in the general range of 4.0x to 6.5x, increasing as EBITDA increases.

**What is a typical revenue multiple?**

6x – 10x: This range of revenue multiples is usually found in companies with a growth rate of below 50%. Investors are choosing companies in this range usually fund startups growing at a rate of 30 – 40% per year. 10x – 20x: This is considered a high-range multiple.

**What are the most common multiples used in valuation?**

The most common multiple used in the valuation of stocks is the price-to-earnings (P/E) multiple. Enterprise value (EV) is a popular performance metric used to calculate different types of multiples, such as the EV to earnings before interest and taxes (EBIT) multiple and the EV to sales multiple.

### How do you find industry multiples?

To establish operating income before depreciation and amortization and enterprise value, the value of the business can be calculated by looking up the sum of its stock market value, its outstanding debt and its cash on the balance sheet and dividing it by EBITDA to determine the multiple.

### What are industry multiples?

Industry specific multiples are the techniques that demonstrate what business is worth. To evaluate the estimate of the value of the business one can use financial ratios such as: Enterprise value (EV) to gross revenues or net sales. EV to net income.

**What are revenue multiples for technology startups?**

Based on this research, the average revenue multiple for startup valuation is 1x – 5x for startups that are growing very slowly (~10% per year), 6x – 10x for startups that are growing in the lower two digits (30-40% per year), and 10x – 20x for tech startups that are growing in the three digits (300-400% per year).

**How many times revenue is a tech business worth?**

Method 1: Multiple of profits (or Price/Earnings ratio) According to the ICAEW, a small unquoted business is usually valued at between 5 and 10 times its annual post-tax profit and a quoted company with excellent prospects may reach 20.