Bloq Valuation Multiple
Definition
A value, typically expressed as a factor, used to multiply a business economic benefit to arrive at the business value.
What It Means
Valuation multiple is a multiplier used to convert a single-point business economic benefit into the business value. The typical economic benefit used in small business valuation is the seller's discretionary cash flow (SDCF). Note that the Valuation multiple is the reciprocal of the Capitalization rate.
Business value estimation as multiple of discretionary earnings
Valuation multiples are used as the key inputs into the Multiple of Discretionary Earnings income-based business valuation method.
