Valuation Multiples Flashcards
1
Q
Cyclical
A
Relative P/E: use with normalized earnings
2
Q
High Tech, High Growth
A
PEG: when there are big differences across firms
3
Q
High Tech / No Earnings
A
Price / Sales or EV / Sales: assume future margins will be good
4
Q
Heavy Infrastructure
A
EV / EBITDA: firms in sector have losses in early years and reported earnings can vary depending on depreciation method
5
Q
REIT
A
Price / Cash Flow or Funds from Operations: generally no capex investments come from equity earnings
6
Q
Financial Services
A
Price / BV, EV to BV, Price / Net Tangible BV: book value often marked to market
7
Q
Retailing
A
Price to Sales: if leverage is similar across firms
8
Q
Retailing
A
EV / Sales: if leverage is different across firms
9
Q
Restaurants
A
EV / EBITDAR: companies that depend on leases
