Valuation Metrics & Multiples – Quick Reference

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Valuation Metrics

Applicable to Most Companies / Industries

Revenue Revenue -
EBIT Earnings Before Interest & Taxes Operating Income(1)
EBITDA Earnings Before Interest, Taxes, Depreciation & Operating Income(1) +
Amortization Depreciation + Amortization
Net Income Net Income Pre-Tax Income * (1 – Tax Rate)
EPS Earnings Per Share Net Income / Weighted Average
Diluted Shares Outstanding
Levered FCF Levered Free Cash Flow Cash Flow from Operations –
CapEx – Mandatory Debt
Principal Repayments
Unlevered FCF Unlevered Free Cash Flow EBIT * (1 – Tax Rate) + Non-Cash
Expenses That Appear in Cash
Flow from Operations – Increase
in Working Capital – CapEx
BV Book Value Total Assets – Goodwill – Other
Intangible Assets – Liabilities(2)

Examples of Industry-Specific Metrics

Retail / Airline Companies:
EBITDAR Earnings Before Interest, Taxes, Depreciation, EBITDA + Rental Expense
Amortization & Rent
Oil & Gas Companies:
EBITDAX Earnings Before Interest, Taxes, Depreciation, EBITDA + Exploration Expense
Amortization & Exploration Expense
Proved Reserves How much – in millions of barrels of oil- -
equivalent – the company is certain to extract in
future years.
Daily Production How much in barrels of oil-equivalent (Boe) -
energy the company is producing each day.
Real Estate Investment Trusts (REITs):
FFO Funds from Operations Net Income + Depreciation – Gain
on Property Sales
AFFO Adjusted Funds from Operations Net Income + Depreciation – Gain
on Property Sales – CapEx
Internet Companies:
UV Unique Visitors -
PV Pageviews -
 Valuation Metrics & Multiples – Quick Reference

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Notes:

(1) Usually you add back non-recurring charges (e.g. Restructuring expenses) and other non-cash expenses
(e.g. Stock-Based Compensation) to Operating Income for EBIT and EBITDA.
(2) Usually you look at Book Value on a per-share basis, so you would divide BV by Shares Outstanding.

Valuation Multiples

Multiple Name: Used For: NOT Used For:

EV / Revenue • Used for many types of companies; most • Banks, financial institutions
important for unprofitable ones
EV / EBIT • Used for many types of companies; most • Banks, financial institutions,
important for those with high CapEx / D&A retail, airlines
EV / EBITDA • Used for many types of companies; most • Banks, financial institutions,
important for those with low CapEx / D&A retail, airlines
P/E • Used for many types of companies; important • Private companies;
for banks and financial institutions unprofitable companies
Equity Value / • Very rare because it is capital structure- • Most companies
Levered FCF dependent; might be used in distressed or
heavy debt scenarios
Enterprise Value / • Used when CapEx, Working Capital, or • Banks, financial institutions
Unlevered FCF Deferred Revenue are important; also critical
in DCFs
P / BV • Used for “Balance Sheet-Centric” companies • Anything other than banks
such as banks and financial institutions and financial institutions

Examples of Industry-Specific Multiples

EV / EBITDAR • Retail, Restaurant, and Airline Companies • If everyone owns their
buildings or if everyone rents
their buildings
EV / EBITDAX • Oil & Gas, Mining, and Natural Resource • Non-Oil &
EV / Proved Reserves Companies Gas/Mining/Natural
EV / Daily Resource Companies
Production
P / FFO per Share • Real Estate Investment Trusts (REITs) • Non-REITs
P / AFFO per Share
EV / Unique Visitors • Internet Companies (usually less profitable or • Non-Internet Companies
EV / Pageviews pre-revenue ones)