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
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
Quoting this to avoid the edit later on
.....did you post a question, just to answer it yourself?
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