What does multiple mean in finance?

In finance, a "multiple" refers to a valuation metric used to assess a company's value relative to a specific financial performance measure, such as earnings, revenue, or cash flow. Common multiples include the Price-to-Earnings (P/E) ratio and the Enterprise Value-to-EBITDA (EV/EBITDA) ratio. Investors and analysts use multiples to compare companies within the same industry or to evaluate whether a stock is overvalued or undervalued. Essentially, multiples provide a quick way to gauge a company's financial standing in relation to its peers.