profit multiple definition

profit multiple

Product of pretax or operating profit and a number (called market multiplier) which is either estimated from the selling prices of comparable businesses or is published by the financial press in some countries. This number commonly ranges from 1 to 5, depending on the current popularity or potential of a particular type of business. Profit multiple is one of the most widely used methods of valuing a business as a going concern. See also sales multiple.

This content can be found on the following page:

http://www.businessdictionary.com/definition/profit-multiple.html