Calculating Historical Valuation

cw4937's picture
Rank: Senior Chimp | 29

I am doing research on a company and wanted to compare current valuations with historical valuations. I have limited resources (yahoo, google, WSJ, TD AMTD, etc.) and I want to specifically know how to calculate EV/EBITDA for the past 4 years. How do I calculate what EV was in 2005,06,07, etc. Also, how do I calculate P/E for those years as well - and when I look at P/E for those years I assume I am still calculating forward P/E? I appreciate any help. Thanks.

Comments (7)

Jun 23, 2009

Enterprise value = market cap + net debt + minority interest
Market cap = number of shares outstanding * share price
Net debt = debt - cash
PE ratio = shareprice / earnings per share

You can find all the required information as stated above in the company's financial statements on its website (investor relations, historical annual reports / financial statements). Maybe you have to use another source for historical share prices.

Good luck.

Jun 23, 2009

Yes I understand the calculation of current EV and P/E etc. What I need to know is how to do it for prior years. What share price do I use is probably what I want to know.

Jun 23, 2009

Also, when I calculate EV/EBITDA for 2005 and what the P/E was in 2005, do I use 2006 EBITDA and Earnings with 2005 price and EV? And for EV for 2005 do I use debt and cash at the end of 2004?

Jun 23, 2009

For prior years, you have to look at historical annual reports of the company. For example 2005, you have to take 2005 EBITDA and 2005 EV. With respect to the share price, you can take the average or you choose a particular date. Furthermore,it is better to use semi annual reports.

Jun 23, 2009

take the share price as of the valuation date that you want. use yahoo finance for historical prices but make sure you use the unadjusted share price. take the EBITDA or earnings from that most recent 10K/10Q PRIOR to the valuation date (to be even more technically correct, make sure that the 10K/10Q was filed prior to the valuation date). also make sure that you use the share count as of the valuation date (actually, most recent to the valuation date), which you can get from that same 10K/10Q.

you can only do trailing multiples. you will not be able to do historical forward multiples because you do not have a source for historical projections.

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Jun 23, 2009

I assume I can't take 2006 earnings and EBITDA for 2005 forward multiples?

Jun 23, 2009