Enterprise Value to Sales and Other Enterprise Value Multiples

Which of the following enterprise value multiples is most likely to be affected by differences in tax rates?

That's not it. EBIT is earnings before interest and taxes, meaning that tax expense does not affect the measure.

Exactly! Free cash flow to the firm is an after-tax measure, as it includes only the cash available for payments to bondholders and stockholders. The rest of the popular denominators for multiples—sales, EBIT, EBITA, and EBITDA—are all pre-tax measures, none of which would be affected by tax rate differences.

Actually, no. Sales occurs on the income statement long before tax expense is considered.

EV/EBIT

EV/FCFF

EV/sales