$1$ point

A $$ summarizes in a single number the relationship between the market value of a company's stock and some fundamental quantity, such as earnings, sales, or book value. A $$ evaluates the price of a share of stock by considering what a share buys in terms of earnings, net assets, cash flow or some other measure of value $($stated on a per share basis$).$ An $$ multiple evaluates the market value of total company value $($minus the value of cash and short$-$term investments$)$ relative to the amount of EBITDA, sales, or operating cash flow it generates. Two methods underpin analysts' use of price and enterprise value multiples: the method of $$ and the method based on forecasted $$ Multiples are appealing because of $$ and $,$ but $$ may affect comparability.

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