Enterprise Multiple

Enterprise multiple, also known as the EV multiple, is a ratio used to determine the value of a company. The enterprise multiple looks at a firm in the way that a potential acquirer would by considering the company’s debt. Stocks with an enterprise multiple of less than 7.5x based on the last 12 months (LTM) is generally considered a good value. However, using a strict cutoff is generally not appropriate because this is not an exact science.