A
Glossary
Enterprise Value to Revenue
Also: EV/Sales
Essential — core valuation theory
What it measures
Takeover price vs yearly sales. Useful when there is no profit yet; a high number implies high margins are expected later.
Formula
Enterprise Value ÷ RevenueBenchmark
S&P 500 avg ~2.5x
Related metrics
Source
Damodaran, Investment Valuation (2012), ch. 20