eli5: What does it mean when a CEO/CFO says “we are trading at 5x”?

Question

eli5: What does it mean when a CEO/CFO says “we are trading at 5x”?

In: Economics

Answer 1

I’ll break it down really ELI5- if a company has a revenue of 1m, they are trading at a value of 5m, 5x their book value.