EV vs. Equity Multiples

Pair pre-interest metrics with enterprise value and after-interest metrics with equity value. Mismatching is the classic error.

By the end you can

✓Apply the matching principle
✓List the common multiples on each side

The matching principle

A metric measured before interest belongs to all investors, so pair it with enterprise value. A metric measured after interest belongs to equity, so pair it with equity value (price).

Enterprise value multiples

›
›
› / EBIT

Equity value multiples

› (price to earnings)
›P / B (price to book)
›PEG ( to growth)

Check yourself

Which pairing is correct?