# Enterprise Value to Revenue Multiple (EV/R)

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

## What is Enterprise Value to Revenue Multiple?

Enterprise Value to Revenue Multiple (EV/R) is a financial ratio used in company valuation that compares stock value of a company to its revenue for a given time period. EV/R is often used to evaluate a company before acquisition.

### Enterprise Value to Revenue Multiple Formula

ƒ Sum(Enterprise Value) / Sum(Revenue)

### How to calculate Enterprise Value to Revenue Multiple

If a company’s Enterprise Value (EV) is \$50M and revenue is \$35M, then the company’s EV/R Multiple is 1.4X.

### Start tracking your Enterprise Value to Revenue Multiple data

Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data.

### What is a good Enterprise Value to Revenue Multiple benchmark?

In general, a good EV/R Multiple is between 1x and 3x. However, public SaaS companies range between 6X and 12X EV/R.

### Enterprise Value to Revenue Multiple benchmarks

Public SaaS EV/R Benchmark

Finerva, 2021

### How to visualize Enterprise Value to Revenue Multiple?

The EV/R Multiple is usually expressed as a single number. For example, your EV/R might be 1.5X. The best way to visualize this metric is with a summary chart. Take a look at the example to see what your EV/R data might look like when you start to track it on a dashboard:

### Enterprise Value to Revenue Multiple visualization example

Enterprise Value to Revenue Multiple

2X

0.53

vs previous period

#### Summary Chart

Here's an example of how to visualize your current Enterprise Value to Revenue Multiple data in comparison to a previous time period or date range.

Enterprise Value to Revenue Multiple

#### Chart

Measuring Enterprise Value to Revenue Multiple

## More about Enterprise Value to Revenue Multiple

EV/R Multiple is used to value a company before a potential takeover, evaluate if the stock rice of a company is fair, and to compare companies in the same industry. It is calculated by dividing enterprise value by revenue and is usually expressed as a decimal number or multiple. This metric can be used to look at how well a company generates revenue and can be used even if the company is not yet profitable.

### Recommended resources related to Enterprise Value to Revenue Multiple

How to value SaaS companies