I have an excel sheet of 10 comparable companies with their P/B, P/E, Market Cap, etc. I was asked to valuate this company to see if the sponsor is paying an acceptable price and I have no idea how to start. Can someone help?
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Problem is that I only have P/B and P/E ratios on this excel sheet. Am I supposed to look at other ratios?
Problem is that I only have P/B and P/E ratios on this excel sheet. Am I supposed to look at other ratios?
http://macabacus.com/valuation/comparable-companies
is it possible to valuate using P/B and P/E?
P/E is one metric you can use but P/B is going to be worthless in this case. get some forward EBIT and EBITDA multiples as well as premiums paid
DISCLAIMER: Not in finance yet
If you have their next year dividend (current div x 1+g), growth (ROE x b) and the investors required return (WACC//CAPM) ::: D1/(r-g) = Price
Compare that to the price being asked to see if under/overvalued. Would be my best guess I'm interested to see other approach.
outside of intro to corporate finance the above idea isn't going to hold much weight. Ideally you have the time and resources to do a full DCF, trading and transaction comps and possible an LBO if this is a take-private transaction.
What type of transaction is this?
it's an acquisition. I don't know why the sponsor just sent us a model with that little information.
For an adequate multiple analysis you'd better check the comparable companies ROIC/expected growth.
what industry is the company in?
market cap X share price duh!
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