What Is The Difference Between A Financial Statistic, Financial Metric, Financial Multiple, and Financial Ratio?

What Is The Difference Between A Financial Statistic, Financial Metric, Financial Multiple, and Financial Ratio?

People keep using these terms interchangeably and I want a definitive, concrete, fist-to-the-wall, pigeon-hole answer!

Best
THELABULL

4 Comments
 

I can answer your question son -- when we talk about "ratios" we tend to look at profitability, specifically margins such as gross profit margin, ebitda margin, etc -- these are RATIOS calculated by dividing GP, EBITDA by sales

With "multiples" we are looking at the numerator containing a "value" metric and the denominator containing a financial statistic -- in this case value might be equity value, enterprise value and a financial statistic might be EBITDA, EBIT, sales, etc...

Therefore, to clarify (1) Ratios -- tends to refer to profitability, ie margins OR ROE,ROA,ROIC, etc. (2) Statistics -- metrics like EBITDA, EBIT, etc used in the denominator for calculating multiples (3) multiples -- numerator has a value metric (ie equity value, Enterprise Value) and denomintoar has statistic (4) Metric -- a metric measures something, such as the profit of a company (ie gross profit) and therefore it might be used

LOL -- I hope somebody can confirm or deny this answer or revise it and improve it -- best to you all and happy new years

the la bull

LA Bull
 
Best Response
The Los Angeles Bull

I can answer your question son -- when we talk about "ratios" we tend to look at profitability, specifically margins such as gross profit margin, ebitda margin, etc -- these are RATIOS calculated by dividing GP, EBITDA by sales

With "multiples" we are looking at the numerator containing a "value" metric and the denominator containing a financial statistic -- in this case value might be equity value, enterprise value and a financial statistic might be EBITDA, EBIT, sales, etc...

Therefore, to clarify
(1) Ratios -- tends to refer to profitability, ie margins OR ROE,ROA,ROIC, etc.
(2) Statistics -- metrics like EBITDA, EBIT, etc used in the denominator for calculating multiples
(3) multiples -- numerator has a value metric (ie equity value, Enterprise Value) and denomintoar has statistic
(4) Metric -- a metric measures something, such as the profit of a company (ie gross profit) and therefore it might be used

LOL -- I hope somebody can confirm or deny this answer or revise it and improve it -- best to you all and happy new years

the la bull

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