IBD Interview Question: Which to use for comparable comps and precedent transactions EV/LTM EBITDA, orEV/NTM EBITDA
Which to use for comparable comps and precedent transactions EV/LTM EBITDA multiple, or EV/NTM EBITDA mutiple and Why? In the news report, when they say company A bought company B at an EBITDA multiple of 10x. Are they usually referring to LTM EBITDA multiple or NTM EBITDA multiple and why do they choose report the one versus the other? Thx so much guys and happy Thxgiving!
Not sure what multiples new sources use, but I bet it varies.
For comps models almost always use the forward multiples.
From what I've experienced, precedent is EV/LTM EBITDA and comps are usually EV/'16E EBITDA or possibly NTM EBITDA, I haven't really seen LTM for comps it's usually forward looking.
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