EV/EBITDA Multiple

A valuation ratio comparing a company's enterprise value to its annual revenue. EV/Revenue is often used to value high-growth or pre-profit companies where earnings-based multiples are not meaningful.

The ratio of total value returned (realised plus unrealised) to total capital invested. A MOIC of 3.0x means the investment has generated three times the original capital.

A valuation ratio comparing a company's market capitalisation to its book value. A P/B ratio significantly above 1.0 indicates that the market recognises substantial value beyond what is recorded on the balance sheet, typically reflecting intangible assets.

A valuation methodology that estimates a company's value by comparing it to similar publicly traded companies using financial ratios such as EV/Revenue or EV/EBITDA. Comps provide a market-based reference point but may undervalue intangible-heavy businesses if peers are not well matched.

A market approach valuation technique that estimates the value of a subject company by reference to the trading multiples of publicly listed companies with similar business characteristics. The method involves identifying comparable public companies, selecting appropriate valuation multiples (such as EV/EBITDA or P/E), making adjustments for differences in size, growth, risk, and marketability, and applying the adjusted multiples to the subject company's financial metrics.

A valuation ratio comparing a company's share price to its earnings per share. The P/E ratio indicates how much investors are willing to pay for each pound of earnings and is influenced by growth expectations, risk profile, and the strength of intangible assets.

The additional amount a buyer pays above the pro-rata market value of a company's shares to acquire a controlling interest. The control premium reflects the value of being able to direct the company's strategy, operations, capital allocation, and management.

A modified version of EBITDA that strips out non-recurring, irregular, or non-cash items to present a clearer picture of ongoing operational performance. Adjusted EBITDA is commonly used in growth-stage company valuations where standard EBITDA may be distorted by one-off charges or share-based compensation.

The AI Valuation Premium: How AI Capability Affects Company Value

AI-enabled companies trade at 25-40% higher multiples than peers, but not all AI capability is created equal. This article examines what drives the AI valuation premium, how to assess whether it is justified, and what happens when the premium unravels.

What is a multiple (EV/Revenue, EV/EBITDA) and how do I choose the right one?

Multiples are shortcuts: Enterprise Value / Revenue (EV/Revenue) for growth-stage, EV/EBITDA for profitable companies, EV/Users for early-stage. Choose based on whether your business is profitable.

How do intangible assets interact with valuation multiples?

Companies with strong intangible assets (brands, IP, data moats) tend to command higher valuation multiples than commodity businesses, because buyers pay more for durable, defensible earnings.

How do intangible assets affect company valuation multiples?

Companies with strong intangible assets command higher EV/Revenue and EV/EBITDA multiples because intangibles drive sustainable margins, competitive moats, and scalable growth.