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valuation-api

calculate_ev_to_revenue

Read-onlyIdempotent

Calculate the EV/Revenue (EV/Sales) multiple: enterprise value divided by revenue — a valuation multiple usable for companies with thin, negative or zero EBITDA (e.g. high-growth or pre-profit businesses). Formula: EV/Revenue = Enterprise Value / Revenue. WHEN TO USE: Use for valuing pre-profit / high-growth companies, or as a cross-check alongside EV/EBITDA for mature ones. WHEN NOT TO USE: Do NOT use revenue multiples alone — they ignore profitability entirely (a company can have a low EV/S and still destroy value); pair with margin and growth context. BEHAVIOUR: pure deterministic calculation — no side effects, no network or storage access; idempotent and non-destructive; identical inputs always produce identical outputs. Division by zero, non-finite inputs, or mathematically undefined combinations return an explicit error instead of a number. RETURNS: JSON object { ev_to_revenue: number (e.g. 3.2 = 3.2x), inputs }. PARAMETERS: enterprise_value (required): Enterprise value in currency units, e.g. 10000000. Must be > 0. revenue (required): Revenue (net sales) over the trailing period, e.g. 3100000. Must be > 0.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
revenueYesRevenue (net sales) over the trailing period, e.g. 3100000. Must be > 0.
enterprise_valueYesEnterprise value in currency units, e.g. 10000000. Must be > 0.

Schema Changelog

Changes observed during successful MCP inspections. Dates show when Glama detected each change.

  1. First observed

TDQS

A4.4/5.0
Behavior4/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint, idempotentHint, and destructiveHint, and the description reinforces these by stating 'pure deterministic calculation,' 'no side effects,' 'idempotent and non-destructive,' and 'identical inputs always produce identical outputs.' It goes beyond the annotations by disclosing error behavior for division by zero and non-finite inputs, which is valuable operational context, though some redundancy with annotations exists.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is well-organized with clear labeled sections: formula, when to use, when not to use, behavior, returns, and parameters, and it front-loads the core formula. It is somewhat repetitive around idempotence and non-destructiveness already covered by annotations, but every section still adds practical value and no unnecessary fluff.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a two-parameter deterministic calculator with no output schema, the description is complete: it defines the formula, return shape, error behavior, parameter constraints, and usage boundaries. The explicit JSON return example ('{ ev_to_revenue: number, inputs }') compensates for the absent output schema, so an agent has everything needed to call and interpret the result.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100% and the parameter descriptions in the schema already explain enterprise_value and revenue, their units, examples, and the >0 constraint. The tool description repeats these rather than adding materially new meaning, so it meets the baseline expected when the schema carries the parameter documentation weight.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description states a specific verb ('Calculate'), a precise resource (EV/Revenue multiple), and gives the formula plus a clear characterization of when the metric is relevant (thin/negative/zero EBITDA, high-growth or pre-profit companies). It differentiates itself from sibling EV/EBITDA by explicitly scoping to pre-profit companies and framing EV/EBITDA as the mature-company counterpart.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description includes explicit 'WHEN TO USE' and 'WHEN NOT TO USE' guidance, naming the alternative (EV/EBITDA) and warning against relying on revenue multiples alone. It even instructs pairing with margin and growth context, which is actionable and unambiguous.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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TDQS

A4.6/5.0
Disambiguation5/5

Each tool maps to a distinct financial formula or calculation, and the when-to-use/when-not-to-use guidance cleanly separates closely related cash-flow metrics like NPV, IRR, and MOIC as well as CAPM, WACC, and DCF. There is no pair of tools that appears to perform the same operation.

Naming Consistency4/5

The overwhelming majority of tools follow a consistent calculate_<metric> snake_case pattern with descriptive names. irr_sensitivity breaks the pattern by omitting the calculate_ prefix, and mixing expanded names like cost_of_equity with abbreviations like wacc and moic is a minor deviation.

Tool Count5/5

Twelve tools is well within the ideal range for a focused financial-calculations server. Each tool covers a distinct valuation, discount-rate, or return-metric need without redundancy, so the count feels appropriately scoped.

Completeness4/5

The tool set covers the core valuation workflow: cost of equity, beta unlevering/relevering, WACC, DCF, enterprise-value multiples, and investment return metrics. It lacks a reverse equity-value calculation and an equity-side multiple like P/E, but those are workable gaps rather than severe dead ends.

Resources