P/CFPS vs. EV/EBITDA
Regarding relative valuation for the equity of a company, should both of these be used or just one since they are both cash flow multiples?
Regarding relative valuation for the equity of a company, should both of these be used or just one since they are both cash flow multiples?
Career Resources
EV/EBITDA is not a cash flow multiple
Your question lacks context. EV/EBITDA and P/CFPS look at two completely different things and are non-mutually exclusive to each other. Unlike P/CFPS (dependent on market movement), EV/EBITDA is a "non-market" valuation multiple, and would appropriately be used in the case of a capital-intensive company with substantially large D&A expenses.
what the fuck are you talking about? EV/EBITDA multiples are certainly market driven. it changes daily, just like price per share does. how the fuck do you think you arrive at EV? I'll give you a hint, equity value is in that calc. and oh wait, equity value is the numerator in the other multiple OP was referring to. you should be banned from commenting.
Take a deep breath
i fucking lol'd bro
Me gusta
I am talking about what the maindifferences are between deriving a target share price from a relative P/CFPS approach vs. deriving a target share price from a relative EV/EBITDA multiple (obviously backing into an equity value from your calculated Enterprise Value)
Read this: //www.wallstreetoasis.com/forums/ebitda-vs-operating-cash-flow-vs-free-ca…
"The key OPERATIONAL distinction between EBITDA and CFO/OCF is the Change in Net Working Capital. CFO/OCF are also burdened by taxes and interest expense."
Blanditiis eum dolorem temporibus ut harum debitis dolor. Quis ea doloremque est nobis illo similique voluptatem. Quibusdam rem accusantium tempore possimus et laboriosam voluptatem. Culpa provident perspiciatis beatae fugit eos.
Nihil aut sint quasi rerum autem eius. Aut et culpa adipisci quam eius qui. Et eligendi pariatur et cumque. Perferendis et ut commodi alias accusantium sequi.
Totam aspernatur ipsum quas ut perferendis. Magni commodi odit quam est dolorem nostrum. Ipsam esse beatae nemo officiis libero repudiandae.
Sit corrupti repellendus autem repellendus. Dignissimos corporis quia nesciunt inventore.
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...