how important it's to multiple
Answers
Answer:
It is very important and have a nice day.
Step-by-step explanation:
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Answer:
A multiple measures some aspect of a company's financial well-being, determined by dividing one metric by another metric. Metrics are quantitative tools that measure a company's performance. The metric in the numerator is typically larger than the one in the denominator. Investors use multiples to quantify a company's growth, productivity, and efficiency. They use multiples to make comparisons among companies and find the best investment opportunities.
For example, a multiple can be used to show how much investors are willing to pay per dollar of earnings, as computed by the price-to-earnings (P/E) ratio. Assume you are analyzing a stock with $2 of earnings per share (EPS), which is trading at $20. This stock has a P/E of 10. This means investors are willing to pay a multiple of 10 times the current EPS for the stock.