Equity Multiple

Equity multiple measures total cash returned to investors divided by total cash invested, showing how many times the original equity is returned over the investment period.

CalculationFormula
Equity multipleTotal distributions / Total equity invested
Total distributionsAll cash flows plus final sale proceeds
Includes all returnsOperating cash plus capital appreciation
Time-independentDoes not consider timing of returns


InterpretationMeaning
1.0xBreak-even, no profit or loss
1.5x50% total return on equity
2.0x100% total return, doubled investment
2.5x+Strong performance, more than doubled

Related Terms

Internal Rate of Return (IRR)Cash-on-Cash ReturnReturn on Investment (ROI)Total Return

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