Revenue multiples are financial metrics used to value a company by comparing its revenue to its market value or enterprise value. This ratio helps investors assess how much they are willing to pay for each dollar of revenue generated by the company. Commonly used in industries like technology and retail, revenue multiples provide a quick way to gauge a company's performance relative to its peers. To calculate a revenue multiple, divide the company's valuation (market cap or enterprise value) by its total revenue. For example, if a company has a valuation of $1 million and generates $250,000 in revenue, its revenue multiple would be 4. This means investors are paying four times the revenue for the company, which can indicate growth potential or market confidence in its future earnings.