Valuation

Question 1

Criteria to select comparable companies

Answer 1

1) Geography
2) Industry
3) Financial (e.g., revenue or EBITDA above, below, or between a certain criteria)

Question 2

EntV / EBIT

Answer 2

Used For: most useful for companies where CapEx is more important to factor in

What does it mean: this is a rough approximation of how valuable a company is relative to its income from business operations

Question 3

EntV / EBITDA

Answer 3

Used For: most useful for companies where CapEx are not particularly important

What does it mean: rough approximation of how valuable a company is relative to its operational cash flow

Question 4

P / E

Answer 4

Used For: most relevant for banks and financial institutions; but distorted by non-cash charges, capital structure, and tax rates

What does it mean: how valuable a company is in proportion to its after-tax earnings

Question 5

What is calendarization?

Answer 5

It is when you add the most recent fiscal year + new partial period - old partial period