Growth-Adjusted Multiple
Definition
A valuation multiple that has been adjusted for the difference in growth rate between the comparable company and the subject company. A company growing at twice the rate of a comparable commands a higher multiple, all else being equal. The growth-adjusted multiple applies a scaling factor to the unadjusted comparable multiple to reflect the subject company's superior or inferior growth rate. The growth adjustment is applied after the base multiple is established from the peer set.
Common Misapplication
The most common misapplication is applying a growth adjustment without documenting the adjustment methodology, which makes the resulting multiple unverifiable. The growth adjustment factor and its basis must be stated explicitly alongside the adjusted multiple.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.3: Comparable Company Analysis.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Growth-Adjusted Multiple. https://ffistandard.org/glossary/growth-adjusted-multiple/. 2026.