Multiples - Wording
If Company A trades at a 2.0x multiple, and Company B trades at a 1.0x multiple, would it be correct to say, "Company B is trading at 1.0x below Company A"? It seems simple but I'm so confused.
If Company A trades at a 2.0x multiple, and Company B trades at a 1.0x multiple, would it be correct to say, "Company B is trading at 1.0x below Company A"? It seems simple but I'm so confused.
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I would say Company B trades at a 1.0x discount to Company A or Company A trades at 1.0x premium to Company B.
Instead of "1.0x" you can speak in terms of "turns." (0.5x is a half trun, 1.0x is one turn or a full turn).... "Company B trades at a one turn discount to Company A."
The last one is obviously a joke, for those of you who couldn't tell.
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