I have read some ER reports recently and there is one thing I am trying to understand. Usually I see some dcf valuation output, which is then followed by some ratios. The ratios are lined up and correspond to the forecasted years.
However, what I don't understand is the rationale when putting ev/EBITDA and P/S ratios across time. I mean the numerator in these are derived from the dcf which is derived from the forecasted periods and terminal value.
Do you calculate a specific ev for each period in order to calc these ratios over time or is it that the denominators (EBITDA and sales) over time is compared to the estimated EV or P. From the valuation? Or do you compare to the actual Ev / p as of today?