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Inflation and Value When in doubt about how any action or information plays out in value, I find it useful to go back to value basics, and trace out the effects of that action/information on value drivers.
Thus, without a sense of what comprises a high or low profit margin for a firm, or what the cost of capital is for the typical company, it is easy to create "fairy tale" valuations and analyses. EV/EBIT and EV/EBITDA 4. Standard deviations in equity and firmvalue 4. Debt ratios (Debt to capital, Debt to EBITDA) 1.
The second is the polar opposite on the pricing spectrum, which is the enterprisevalue to sales multiple, where rather than focus on just equity value, I look at operating asset value, and scale it to the broadest of operating metrics, which is revenue.
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EBITDA 
102 
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