Which Multiples are to be used for Valuation of a Company

Valuation based on multiples is the most common valuation tool for investment bankers. What multiples investment bankers look at.
By: Tapan Jindal
 
Nov. 19, 2010 - PRLog -- Enterprise Value Multiples like EV/Sales, EV/EBITDA, EV/EBIT and Equity Multiples Like PE, PEG are used for valuation purposes.

But do you know, Why EV/Net Income and Equity/EBITDA Multiples are not calculated...??

EV (Enterprise Value) is the value of the company as a whole – value for all types of capital holders (either equity or debt), while Net Income is the profit attributable only to the equity holders of the company. Hence, EV/Net Income multiple is meaningless because the numerator (EV) applies to both – Equity & Debt, but the denominator (Net Income) accrues only to equity holders. Similarly, an Equity Value/EBITDA multiple is meaningless because the numerator applies only to shareholders, while the denominator accrues to all holders of capital.

Learn Investment Banking in a simple but 100% practical manner. Gain the experience - How investment bankers work and how they value companies, how they make M&A deals happen.

ARC Academia, Wall St. Training India is organising its next workshop for 5 days and 10 days (only weekends) from 26 December 2010.

Programme Contents:
1)    Basic Financial Concepts & Ratios
2)    Trading Comps
3)    Deal Comps / Precedent Transaction Analysis
4)    Financial Modeling (Historical and Forecasted Financial Statements)
5)    DCF Valuation (WACC, Sensitivity Analysis, Free cash flows, Intrinsic Value)
6)    Company Profiles & Research
7)    Sector Analysis & Research
8)    Equity Research Report  (Initiating Coverage reports, flash notes)
9)    Mergers & Acquisitions including accretion and dilution model
10)  Pitch Books (Buy Side, Sell Side, IPO Pitch Book)
11)  Fund Raising Activities (IPOs, PE etc)
12)  Resume Preparation and Mock Interviews with investment bankers

Programme Details:
Starts on: 26 December 2010, Sunday
Sessions:  Only Saturdays and Sundays
Timings: 1000 hrs to 1730 hrs
Venue: #402, Pearl Business Towers, Netaji Subhash Place, Peetam Pura, New Delhi - 110018


Contact Details:
Tapan Jindal
Email: arc.india@wallst-training.com , info@arc-academia.com
Mobile: +91 98183 46801
Website: www.arc-academia.com
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