Some people refrain from using industry multipliers because the approach focuses too much on gross sales, rather than profit for the year.

Question

Quizplus · Accepted Answer

Industry multipliers often emphasize gross sales or revenue figures rather than net profit, which can lead to an overvaluation or undervaluation of a business if its profitability significantly deviates from the industry average.

Some People Refrain from Using Industry Multipliers Because the Approach