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Equity Multiple
Total cash distributions divided by total equity contributed over the stated investment period, expressed as a multiple.
Equity multiple compares total cash distributions with the equity contributed to an investment. Divide the distributions, including returned capital, by total equity contributed for the stated investment period.
This is a cash multiple, not an annual percentage return. It does not account for when distributions arrive. Identify whether figures are realized or projected and whether fees are included before comparing results.
Source: Wall Street Prep, Equity Multiple, Formula and IRR Comparison.
Frequently Asked Questions
Does equity multiple account for the timing of cash flows?
No. Unlike internal rate of return, the multiple does not reflect how quickly cash is received.
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