Valuation multiples, a widely used tool for appraising businesses, refer to the financial ratios used to compare similar companies in the same industry by determining their relative worth. Most commonly, it involves calculating a company’s market value per share divided by its earnings per share. This helpful metric helps investors better understand overall business valuation: by providing invaluable insight into the past performance of businesses while also giving buyers and sellers an idea of potential future returns. In today’s complex world of global markets, valuation multiples provide essential metrics that can offer guidance and clarity in those all-important decisions.