Which of the following is NOT among the most common valuation multiples listed?

• A. P/S
• B. EV/Revenue
• C. EV/EBITDA
• D. P/BV

Answer: (A)

The main idea here is that some valuation multiples are more informative and widely used because they normalize for different aspects of a business, like profitability, cash flow, and capital structure. Among the commonly cited multiples, enterprise-value–based measures such as EV/EBITDA and EV/Revenue are popular because they reflect operating performance independent of financing decisions. Price-based multiples like P/E and P/BV are also standard, since they tie value to earnings or book value, which are fundamental to many investors.

P/S, or price-to-sales, is not as commonly used because revenue alone doesn’t reveal profitability or cash generation. Companies with the same or higher revenue can have very different margins, costs, and capital needs, making P/S less reliable for cross-company comparisons. It’s sometimes used for unprofitable or high-growth firms where earnings are not meaningful yet, but overall it’s not among the most standard valuation multiples.