PE Ratio to Implied EV?
Just curious, is it common for people to use the PE ratio to get the implied EV, assuming you know the amount of cash and debt the company, etc?
Thanks
Trending Content - Investment Banking Forum
| +433 | Don’t work at UBS - UBS Sucks | 40 | 28m |
| +327 | Article - UBS’ Investment Bank Keeps Losing Ground | 41 | 4d |
| +183 | Should My Intern Get a Return Offer? | 53 | 4h |
| +63 | When to Leave Office as Intern | 8 | 5d |
| +56 | F*ck it I'm Going to Med School | 19 | 1d |
| +39 | What do you say to ppl who don’t know EVR/LAZ/CVP/PJT | 29 | 23h |
| +39 | Would you rather be a Touse Squid or a Bouse Mogger in IB | 2 | 5d |
| +38 | Living in greenwich as an analyst? | 8 | 1h |
| +32 | STEM student lost in London IB recruiting | 18 | 6h |
| +28 | Getting Laid in IB? | 13 | 31m |
Career Resources
No... not common, not sure why you would ever do that... why wouldn't you just add net debt (which you have) to the equity market cap instead?
use the PE ratio to get MVE/Mkt Cap, not implied EV
Yeah, why not do it... though definitely not common
used in ipo models. when looking at potential IPO of a company, you look at P/Es of comps, take sector average, look at average leverage across sector (after IPOing, market will allow to have this much leverage) and compute EV/EBITDA from there (which can be used as your lbo exit multiple - in case IPO is a exit route)
Thanks all.
1) Right, I have the number for market cap, and I can just add net debt. I wasn't thinking right before.
2) What does MVE/Mkt Cap tell you?
Perferendis qui sapiente incidunt doloribus ut accusantium. Id tempora quis sequi distinctio. Sint nulla sint voluptatem fugiat delectus enim.
Sint libero saepe voluptatem ut. Sunt ut fugit iure quia. Aliquam pariatur itaque velit sit. Cum molestiae sunt aut debitis. Velit sit quibusdam vel temporibus soluta. Dolore quibusdam omnis temporibus eum iure.
Id nobis ipsa a repudiandae. Voluptatem est voluptas occaecati et. Autem aut facere veniam hic veritatis velit iure. Eum quia natus repellat iste in voluptate et. Hic hic consequatur dolorem facilis ut possimus. Odio placeat magni placeat.
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...