EV / Assets

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Definition

Enterprise Value to Assets is the enterprise value of a company divided by its total assets. It should be the default EV multiple when the business is asset driven (when ROA is relatively constant and assets show future cash flows the best).

A high (low) EV/Assets mean the company is potentially overvalued (undervalued).

EV/Financial Metrics are often used by analysts to quickly look at a company's valuation multiples. All things being equal, the lower this ratio is, the better.


Other similar metrics include :
EV/EBITDA : How much is each dollar of EBITDA worth to investors?
EV/Revenues : Or each dollar of Revenues?
EV/Free Cash Flow : Or each dollar of FCF?

For more information on evaluating valuation multiples similar to this, please see our original white paper research : Making Sense Of Valuation Multiples.

Formula

Ev_assets = enterprise values / assets
(See enterprise value link below for details about how it is calculated)

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