PROFIT MULTIPLE Definition

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PROFIT MULTIPLE: Profit and sales multiples are the most widely used valuation benchmarks used in valuing a business. The information needed are pretax profits and a market multiplier, which may be 1, 2, 3, or 4 and usually a ceiling of 5. The market multiplier can be found in various financial publications, as well as analyzing the sale of comparable businesses. This method is easy to understand and use. The profit multiple is often used as the valuation ceiling benchmark.

Learn new Accounting Terms

BASIC is Beginners All-Purpose Symbolic Instruction Code.

SALES INVOICE is a document that records the sale of goods or services from a vendor to a customer.

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