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By the same token, it is impossible to use a pricing metric (PE or EV to EBITDA), without a sense of the cross sectional distribution of that metric at the time. For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive.
Beta & Risk 1. EBIT & EBITDA multiple s 5. Working capital needs Thus, I compute pricing multiples based on revenues (EV to Sales, Price to Sales), earnings (PE, PEG), book value (PBV, EV to Invested Capital) or cash flow proxies (EV to EBITDA). Return on Equity 1. Debt Ratios & Fundamentals 1. Debt Details 1.
Practitioners assume the business is sold as a multiple of some financial metric like EBITDA, based on what they can see today for other businesses that were sold, and what these comparable trading multiples are. . B = Beta. (Rm Tax (from tax rate and EBIT). EV/EBITDA Multiple. Ce = Cost of Equity. Rf = Risk-free Rate.
With Valutico’s new development, practitioners can quickly perform a VC valuation based on EV/Sales, EV/EBITDA, EV/EBIT and P/E multiples as a useful addition to other research on the company and the industry. The calculation of these discount rates are based on the observed betas of similar listed peer companies.
Beta & Risk 1. EBIT & EBITDA multiple s 5. Since I update the data only once a year, it will age as we go through 2025, but that aging will be most felt, if you use my pricing multiples (PE, PBV, EV to EBITDA etc.) Return on Equity 1. Debt Ratios & Fundamentals 1. Debt Details 1. Buybacks 2.
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