That is why GE Vernova trades at a premium, as high as 62x EBITDA in June of this year. The U.S.-based energy technology provider carries a $50 billion backlog, a services engine that makes two-thirds of that revenue recurring, major manufacturing investments to meet rising demand, and partnerships that tie it to the data center and electrification boom. Those systems give investors confidence that growth will arrive predictably.

Siemens Energy, a German multinational of similar scale in turbines and transmission, tells a different story, with a trailing EV/EBITDA of 21.6x. Still extremely strong in comparison to other industries, but struggles within particular business lines. For example, its wind division has had cost overruns and quality failures, forcing profit warnings and bailouts. Such weaknesses show an absence of systemised controls and forecasting. Both firms generate comparable EBITDA, yet one is valued at more than triple the multiple of the other. This is valuation arbitrage: multiples swing on systems, not just numbers.

Why Financial Metrics Alone Fail

Financial statements are essential, but they describe the past. EBITDA confirms discipline and scale, but it cannot guarantee that revenue will arrive predictably or that margins will hold when conditions shift.

That is why investors interrogate the commercial engine behind the numbers. As we know, they want to measure the quality of the earnings. If revenue is concentrated in a few clients, one change in procurement can cut value sharply. If pricing power is weak or delivery costs rise, margin strength may be temporary. If growth depends on a founder or small group of relationships, scale is limited and succession risky.

A strong P&L can therefore hide weak systems, and markets put a price on that risk. Valuation multiples are a confidence rating on future cash flow. Two firms with similar EBITDA can exit at very different values because one has diversified demand, clear pricing authority, and a repeatable go-to-market, while the other relies on goodwill and effort.

Financial metrics are lagging indicators. Systems that run your commercial growth strategy are the leading indicators that investors actually pay for.

How Investors Assess Commercial Systems

Investors increasingly weigh commercial maturity alongside financial results, and they test it with rigour during diligence.

They look first at sales infrastructure. A predictable pipeline, clear stages, and accurate conversion benchmarks give confidence that growth is engineered, not improvised.

They then examine brand positioning. Brand is often treated as intangible, but investors use it as a hard test for pricing power. A strong brand passes on three measures.

First is pricing power. Apple and Mercedes demand the top of their price point because brand strength lets them set prices.

Second is margin. Pricing power translates directly into contribution. Tesla makes more margin per car than almost every other automaker except Ferrari.

Third is the repeat rate. The best predictor that someone will buy another iPhone is that they already own one.

This simple three-part test of pricing power, margin, and repeat rate quantifies brand in a way investors can underwrite. Counterexamples exist, such as Walmart, where the brand promise is low price and low margin. But compared to peers, its gross margins remain top tier. For valuation purposes, brand is about measurable pricing authority, protected margins, and predictable repeat business.

Revenue operations is the next focus. The central question is: what does it take for this business to generate revenue into the future? Investors want to see every part of the engine mapped, costed, and benchmarked. That means bundling all costs to acquire, convert, and retain clients, then judging how efficiently each function contributes.

Different components of the system play different roles. Digital marketing is evaluated on reach, cost-per-lead, and conversion to opportunity. A sales team is judged on close rates, deal value, and payback on compensation. Client success is measured by retention, upsell, and lifetime value expansion. The key point: while each role is measured differently, none escape scrutiny.

When a company can show a clear line from programme costs to revenue outcomes—for example, that €1 in digital spend generates €4 of pipeline, or that the average salesperson produces revenue at five times their cost—investors gain confidence that growth is engineered, not accidental.

This is the commercial maturity premium. Two firms with the same earnings can be valued differently because one demonstrates that its revenue engine is engineered, measured, and improved continuously, while the other relies on relationships.

Practical Ways CFOs & CEOs Can Strengthen Enterprise Value

Strengthening enterprise value is a practical exercise. The sequence is simple: simplify → systematise → automate.

Simplify first. Many mid-market firms collect data they never use. Archive redundant reports, remove noise, and rewrite the few reports that matter so they are clear. Clarity shortens feedback loops and improves forecasting. As Elon Musk put it: “Don’t automate something that should be deleted.” The best process is no process, and the best part is no part.

Systematise next. Once complexity is reduced, data and operating cadence can be organised into a consistent framework. Define a tagging taxonomy for revenue and expense lines. Align CRM stages with finance and delivery milestones. Assign ownership of metrics so definitions remain consistent. Move pipeline, pricing, utilisation, and backlog into a central model and review them together in a weekly forum. When investors can trace a euro from lead to invoice to margin within one system, confidence rises.

Automate last. With clean, systemised data, automation compounds the benefits. AI can now act as an internal auditor, surfacing anomalies in conversion rates, spotting leakage between quote and cash, and monitoring margin drift. Automated alerts for pipeline coverage, pricing exceptions, and billing delays highlight risks before they hit the P&L. In financial and professional services, these tools cut time-to-insight and free leaders to focus on allocation, risk, and growth.

Governance is also being reshaped by AI. Standardised definitions, reconciled systems, and near real-time reporting build trust, but AI strengthens this by providing continuous oversight. When dashboards match the general ledger and CRM automatically, investors know the engine is controllable and that forecasts are credible.

As the operating system matures, the business becomes easier to forecast, faster to adapt, and less dependent on individuals. That is what the multiple recognises: dependable growth with protected margins.

Conclusion

Valuation arbitrage exists because investors pay for confidence in tomorrow, not proof of yesterday. Financial metrics do not capture the maturity of the growth engine that will produce the next twelve quarters.

CFOs and CEOs who integrate commercial maturity into their operating model do not just protect valuation, they multiply it. Clean data, scalable systems, and disciplined revenue management convert profit into predictability, and predictability into stronger multiples.

Financials open the door. Systems decide the price.