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Glossary

Enterprise Value to Revenue

Also: EV/Sales

Essential — core valuation theory

What it measures

Total company value vs annual sales. Useful for cross-industry comparison and unprofitable companies.

Formula

(Market Cap + Debt - Cash) / Revenue

Benchmark

S&P 500 avg ~2.5x

Related metrics

EV/EBITDAP/SGross Margin

Source

Damodaran, Investment Valuation (2012), ch. 20

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