Valuation Multiplier is a figure used by business owners and investors to gauge the current worth of an asset relative to its future potential. This figure measures the potential return on investment if the asset is purchased at its current price. It’s calculated by dividing the asset’s current value by the expected future earnings or cash flows that it has the potential to generate. By using Valuation Multipliers, entrepreneurs can determine whether they should buy, sell, or hold a given asset. This gives them better insight into their potential returns and helps them make smarter investments for their businesses.