What are the most common multiples used in Valuation?

• A. EV/Revenue, EV/EBITDA, EV/EBIT, P/E, and P/BV
• B. P/S, P/CF, EV/FCF, P/B
• C. EV/NI, P/AE, P/EBIT
• D. Price/Revenue, Price/Book, EV/FCF, P/E

Answer: (A)

In valuation, you want multiples that reflect both the size of the business and how it generates cash, while staying comparable across peers. The most common set includes enterprise-value multiples—EV/Revenue, EV/EBITDA, and EV/EBIT—because they measure the scale of the firm’s operations independent of financing and taxes, making them robust across different capital structures. On the equity side, price-based multiples like P/E and P/BV are staples for investors since they tie the stock price to earnings and asset backing, which are the perspectives most equity investors care about. Together, these five cover both how big the business is and how its fundamentals translate into value for shareholders, which is why they’re widely used in practice. Other multiples like P/CF or EV/FCF exist and are useful in certain contexts, but they’re not as universally applicable as the combination above.