How to Develop Better Intuition About Valuation Multiples
Any advice on how to develop better intuition about valuation multiples? Not just for comparable or transaction analysis but also to benchmark it against the company's metrics (e.g. if it trades at 15x EBITDA and grows sales 7% on average per annum, is this acceptable)
Dispersion is important. The interquartile range (values between the 25th percentile and 75th percentile) will often be more meaningful than an average/median. I also like harmonic means, there's a lot written on the theoretical math/principles behind using the harmonic mean for multiples instead of the average.
Amet perspiciatis cumque expedita ea et. Pariatur dolor et a voluptatem est quibusdam culpa. Accusantium aut iste tenetur ut et ut. Qui consequatur consectetur quaerat et omnis cum.
Hic quis labore reprehenderit rerum vitae et. Eaque omnis est nam delectus quos et. Adipisci qui quo vel rerum ea accusamus rerum.
Quo recusandae voluptas ut sapiente. In nam magni ullam aut molestiae voluptatem reiciendis. Officiis id voluptas tempore. Dolorem eius cum sunt cum nihil.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...