oboloo Glossary

Business Valuation Multiple

oboloo Glossary

Business Valuation Multiple

Business Valuation Multiple is a concept used in the valuation of companies, where the company’s worth is determined by its future ability to generate revenue and profit. It involves determining how much money the company can realistically earn over its lifetime, and then multiplying this figure by some sort of multiple, typically ranging from 1 to 10. A higher multiple suggests that the company is more valuable than one with a lower multiple; as such, it has greater potential for growth, profitability and increased shareholder returns. So if you’re looking to invest in a business, keep an eye on their Business Valuation Multiple – it could be the difference between success and failure!