Editing Enterprise value (section)

===Avoiding temporal mismatches===
When using valuation multiples such as EV/EBITDA and EV/EBIT, the numerator should correspond to the denominator. In other words, the profitability metric in the denominator should be available to all stakeholders represented in the numerator. The EV should, therefore, correspond to the market value of the assets that were used to generate the profits in question, excluding assets acquired (and including assets disposed) during a different financial reporting period. This requires restating EV for any mergers and acquisitions (whether paid in cash or equity), significant capital investments or significant changes in [[working capital]] occurring after or during the reporting period being examined. Ideally, multiples should be calculated using the market value of the weighted average capital employed of the company during the comparable financial period.

When calculating multiples over different time periods (e.g. historic multiples vs forward multiples), EV should be adjusted to reflect the weighted average invested capital of the company in each period.<ref group="note">This is analogous to the way earnings per share (net income / weighted average number of shares) is influenced by changes in the number of shares over different financial years.</ref>