The multiplier measures the well-being of a company by comparing two measures, usually by dividing one by the other.
Investors typically rely on two stock valuation methods: one based on cash flow and the other based on multiples of performance.
The most common multiple used in valuing stocks is the price-to-earnings (P/E) multiple.
Enterprise Value (EV) is a popular performance measure used to calculate various types of multiples such as EV to earnings before interest and taxes (EBIT) and EV to sales.