The Motley Fool Discussion Boards

Previous Page

Learning to Invest / Terms, Definitions, & Jargon


Subject:  Re: Fool terminology/glossary Date:  4/10/2004  2:51 PM
Author:  Byrne2000 Number:  1344 of 2244

Multiple is a pretty basic term. A multiple refers to the price of a company's stock relative to some other measurement like earnings, book value, sales, EBITDA, etc. If A company has a sales multiple of 2x's, this simply means the market cap is two times greater than the Sales for that company. People will refer to multiples when trying to assess a company's value relative to others. Pepsi has a foward P/E multiple of 16x's and Coke has a foward P/E multiple of 21x's. This good mean that Pepsi is trading cheaply compared to Coke or Coke his higher quality earnings that are worth more. Hope this helps.
Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us