EV/Revenue

Valuation
Updated Apr 2026 • Has calculator

Enterprise Value divided by annual revenue — a capital-structure-neutral alternative to the P/S ratio.

What is EV/Revenue?

EV/Revenue (Enterprise Value to Revenue) divides a company's enterprise value by its annual revenue. Unlike the P/S ratio, EV/Revenue accounts for a company's debt and cash, making it a more accurate measure for comparing companies with different capital structures. It is particularly useful for valuing pre-profit companies and for merger and acquisition analysis where the acquirer assumes all liabilities. Lower multiples suggest the company is cheap relative to its revenue; higher multiples reflect growth expectations or strong competitive moats.

Formula

EV/Revenue = Enterprise Value ÷ Annual Revenue

Worked Example

Worked example — Apple Inc. (AAPL)

FY2024

Step 1  Market cap: ~$3,500,000M + Debt $96,455M − Cash $29,943M = EV ~$3,566,512M
Step 2  Annual revenue (FY2024): $391,035M
Step 3  EV/Revenue = $3,566,512M ÷ $391,035M = 9.12x
Step 4  → Apple's enterprise value equals 9× its annual sales

Source: Apple 10-K FY2024 (2024-11-01)

Calculate EV/Revenue

Market cap + total debt − cash, in millions of USD

Total annual revenue in millions of USD

EV/Revenue

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Not investment advice.

How to Interpret EV/Revenue

< 1
Deep Value — EV near or below revenue
1 – 3
Reasonable — low multiple by most benchmarks
3 – 10
Growth Premium — market pricing in future growth
> 10
High Premium — exceptional growth expected

📚 Advanced Valuation — Complete the path

  1. EV/EBIT
  2. EV/Revenue
  3. P/S Ratio
  4. P/CF Ratio
  5. P/FCF Ratio
Sources
  1. CFA Institute — Equity Valuation
  2. Investopedia — EV/Revenue