purchase price intv question PE
This was a intv question:
If a company has 2.6M revenue and 1.1M ebitda, purchase price?
Explain your methodology.
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I don’t think they’re looking for a number. I think they’re looking for your thought process. Does the industry use revenue or EBITDA multiples?What is the range of industry multiples? What are historical growth rates? How volatile have revenue and EBITDA been? What is the company’s free cash flow conversion? Any insight into NTM values?
Hmm seems like a weirdly vague question but id prolly say id find some ebitda multiples of m&a comps slap the median on there and find a rough EV.
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