what is the enterprise value to revenue multiple ev r 
the enterprise value to revenue multiple ev r is a measure of the value of a stock that compares a company s enterprise value to its revenue ev r is one of several fundamental indicators that investors use to determine whether a stock is priced fairly the ev r multiple is also often used to determine a company s valuation in the case of a potential acquisition it s also called the enterprise value to sales multiple understanding enterprise value to revenue multiple ev r the enterprise value to revenue ev r multiple helps compare a company s revenues to its enterprise value the lower the better in that a lower ev r multiple signals a company is undervalued generally used as a valuation multiple the ev r is often used during acquisitions an acquirer will use the ev r multiple to determine an appropriate fair value the enterprise value is used because it adds debt and takes out cash which an acquirer would take on and receive respectively 