Term
Valuation multiple
A price divided by a measure of the business, so companies of different sizes can be compared. P/E divides the share price by earnings per share; EV/EBITDA divides enterprise value by EBITDA.
In pesos: A stand that sells for $300,000 MXN and earns $30,000 a year costs 10 times its earnings; another one that sells for $450,000 with the same earnings costs 15 times: you pay more for each peso it makes.
Where to go deeper
2/4 6 min Read What you actually buy when you buy a share A share is a piece of a company, not a number on a screen. Where its value comes from, why the price moves, what a dividend is, and why it is not a lottery ticket.More terms on the same topic
Educational content only: not financial, investment or tax advice. The numbers are examples to understand the idea, not a forecast or a recommendation.