Valuation multiple is a financial indicator used to assess the value of a company or its shares based on certain economic parameters. This multiple is calculated as the ratio between the value of the company (or its shares) and a selected financial metric, such as earnings, revenue, or equity. For example, the P/E ratio (price-to-earnings ratio) compares the market price of a share with its earnings per share, while the P/B ratio (price-to-book ratio) compares the market price of a share with its book value. Valuation multiples help investors assess whether a company is overvalued or undervalued in relation to its financial performance and market standards.