📊 8 Valuation Multiples Every Investor Should Know
Different multiples help answer different questions about a company’s valuation.
P/E: How much investors pay for every rupee of earnings.
PEG: Whether a stock’s valuation looks reasonable relative to earnings growth.
EV/EBITDA: Values a business relative to its operating earnings.
EV/Sales: Compares enterprise value with revenue, useful when profits are low or negative.
P/B: Compares market value with book value, often used for banks and financial companies.
P/Tangible Book: Compares market value with tangible net assets.
P/FCF: Shows how much investors pay for each rupee of free cash flow.
Dividend Yield: Measures annual dividends relative to the share price.
💡 Key takeaway: No single multiple works for every company. The right metric depends on the business model, profitability, growth and industry.
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