Hello,
How would you compute historical EV/EBITDA multiples for a listed company in order to compare them with the actual multiple?
Let's say the current date is 31 Dec. 2011, the company fiscal year ends on 31 Dec., hence to compute the actual 2011 multiple I use the market capitalization and reported EBITDA as of 31 Dec. 2011.
How do I compute the historical EV/EBITDA mulitples for 2010?
[Answer 1] I use the EV and the EBITDA as of 31 Dec. 2010
[Answer 2] I use the EV as of 31 Dec. 2011 and EBITDA as of 31 Dec. 2010
[Answer 3] None of the above
Thanks in advance
Answer 1
Note that these would all be LTM multiples... if you wanted to do forward year multiples you would just use the forward year estimated EBITDA
Like the guy above me posted, you want to use forward multiples when valuing a company using multiples. Or, typically you do.
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