Even though revenue does not tell you everything about a book, it is an essential starting point for a valuation. At the end of the day, it is future cash-flow that you are purchasing so we consider this to be an essential component.
Depending on the risk-tolerance of the investor, the required return, and various individual book factors, during a valuation, we determine an appropriate multiple to use.
Of course, revenue is only one piece of the valuation puzzle, so it is vital to examine the other elements involved.
