EV/GCI

EV/GCI (enterprise value/gross cash invested) is an advanced valuation multiple used to compare a company's book value of its assets to their current market value. The ratio is similar to P/B ratio, but EV/GCI is calculated on an EV-basis, taking into account all the company's security-holders.[1]

Formula

GCI (Gross cash invested) = Gross tangible and intangible assets before depreciation or write-offs + investments in associates + working capital[2]

When EV/GCI is higher than 1, then the market is willing to pay a valuation premium. A discount takes place in the opposite case.

References
  1. "Introducing GS Sustain". Retrieved 29 October 2015.
  2. Workshop V: Relative Valuation
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