EV/Revenue — Enterprise Value to Revenue
DeepScreen explains EV/Revenue as follows: EV/Revenue values operations while accounting for debt and cash. It helps compare companies with different financing, especially before profits become stable.
Formula
Enterprise value ÷ annual revenue
Illustrative example
Enterprise value of 900 million divided by annual revenue of 300 million gives EV/Revenue of 3x. Both inputs must use the same currency and unit.
Educational example; these are not reported company figures.
How to interpret it
- Lower multiples may signal value or weak margins.
- Higher multiples require growth and future margin expansion.
Limitations
- It ignores current profitability.
- Sector economics determine a sensible range.
Frequently asked questions
- What is EV/Revenue?
- EV/Revenue values operations while accounting for debt and cash. It helps compare companies with different financing, especially before profits become stable.
- How is EV/Revenue calculated?
- Enterprise value ÷ annual revenue
- What should investors watch for with EV/Revenue?
- It ignores current profitability. Sector economics determine a sensible range.
. Educational analytical content, not investment advice.