Equity Multiple (EM)
The equity multiple is total cash returned divided by equity invested — a 2.0x means you doubled your money. It measures total profit, where IRR measures speed.
The equity multiple (EM) = total cash distributed ÷ equity invested. A 2.0x means every dollar in came back as two dollars (your dollar plus a dollar of profit), across the full hold, ignoring timing.
Why it matters: the equity multiple is the plain-dollars companion to IRR. IRR rewards getting cash back fast; the multiple measures how much comes back in total. A short, high-IRR deal can return less actual money than a longer, lower-IRR one — so investors read the two together.
Rules of thumb: below 1.0x you lost principal; 1.0x–1.5x is modest; many value-add holds target 1.8x–2.5x+. A stabilized income play returns a lower multiple by design.
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