Transaction Multiple
Definition
The valuation multiple implied by a completed acquisition transaction, calculated as the transaction enterprise value divided by the target company's relevant financial metric at the time of the transaction. Transaction multiples are the primary data points in precedent transaction analysis and typically include a control premium not present in trading multiples.
Common Misapplication
The most common misapplication is calculating transaction multiples using forward financial metrics rather than trailing metrics without specifying which basis is being used. A transaction multiple that looks different depending on whether trailing or forward metrics are used must specify the basis explicitly.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.4: Precedent Transaction 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: Transaction Multiple. https://ffistandard.org/glossary/transaction-multiple/. 2026.