Times Revenue Method

See: Revenue Multiple.

It's a valuation methodology that bankers and investors use to value companies that have low or no earnings...or earnings which aren't reflective of the valuation of the company. So they take whatever the revenues are of the company...let's say it's a $100 million revenue airline (small one) which has $5 million in earnings and is growing 20% a year (fast for an airline). Well, at 20x earnings, the company gets a valuation of one times revenues.

Now take a software company that's growing revenues 30%. It also has $100 million in revenues, but way higher profit margins of 25%. So, at 30x that $25 million in earnings, the company trades at $750 million, or 7.5x revenues.

Big multiple. The revenue multiple helps simplify things. A lot.