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Comparable Multiples of Valuation

June 20, 2017 mfadmin Finance and Accounting

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Comparable Multiples of Valuation

(Price of Firm A / Earnings of Firm A) x Earnings of Firm B = Price of Firm B

finance and accounting

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Previous Post:Discounted Cash Flows (DCF),”1. Forecast as far as you can into the future (usually 3-5 years) and construct pro forma statements.2. Compute the FCF for each year.3. In the last year

Next Post:Valuation Caveats,”1. Taking Out Salary: primarily related to small businesses.2. Liquidity Discount: private firms (not very liquid) carry a heavy discount relative to publicly traded firms (liquid). Discount typically between 40-50%.3. Control Premium: current stock price is the price for a minority ownership in the firm. If you want control

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