Benchmarks: EV/Revenue
EV/Revenue: Calculated by dividing
Enterprise Value by Revenue is often used to
benchmark the fair market value of a company. It's key benefit
over the other enterprise value multiples like EV/EBITDA
and EV/EBIT or equity multiples like
P/E ratio is that it can be used for companies that have
negative earnings.
Companies with higher profit margins usually trade at higher
EV/Revenue multiples.