Definition of An exit multiple

An exit multiple is one of the most commonly used terms in finance and it refers to the terminal multiple at which any given project will be exited. The most commonly used multiple is EV / EBITDA.

Terminal Multiples Definition / Exit Multiples

Exit multiples are often used for valuations. For example, if the standard EV / Revenue multiple for a sector is 3x and you have a 5 year financial projection model, you can estimate the value of the company in each of those 5 years using revenue projections and the 3x EV / Revenue multiple.