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Name: ___Date: ___Per: ___Vocabulary Workshop Unit 7TEST on ___Definitions: Listen to the teacher\'s pronunciation and explanation of each definition. Note that the words can have multiple parts of
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In a financial context, 'multiple' refers to a ratio used to evaluate a company's valuation or performance by comparing it to a financial metric, such as earnings or revenue.
Typically, businesses and individuals engaged in various financial activities, including corporations and partnerships, may be required to file reports or statements that involve multiple financial ratios and metrics.
To fill out a multiple, one generally calculates the appropriate financial metrics (like earnings or Revenue) and then applies the ratio formula, ensuring all components are correctly represented and reported according to regulations.
The purpose of using multiples is to provide investors and analysts with a quick and effective way to assess the relative value of a company and to facilitate comparisons across similar firms within the same industry.
Information that typically must be reported includes financial metrics such as earnings before interest and taxes (EBIT), net income, revenue, and the specific ratio being used (like price-to-earnings ratio).
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