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Multiples Valuation: Theory and Practice
Rating: 4.7 out of 5(350 ratings)
1,087 students

Multiples Valuation: Theory and Practice

Master Multiples Valuation: A Comprehensive Guide to Assessing Company Value Using Multiples
Created by365 Careers
Last updated 4/2023
English
English [Auto],

What you'll learn

  • How to use valuation multiples
  • Which are the key principles of relative valuation
  • Perform multiples valuation in practice
  • How to adjust financials for a precise multiples valuation
  • How to select comparable companies

Course content

2 sections • 13 lectures • 1h 6m total length

  • How to use valuation multiples4:52

    Apply valuation multiples to compare similar assets, using ratios like price per square foot to gauge fair price and triangulate with DCF, while considering market sentiment.

  • Types of valuation multiples3:24

    Compare firms using earnings multiples, such as price per earnings and enterprise value over ebitda, then use sales multiples when profitability is uncertain, with industry indicators as a last resort.

  • Transaction multiples3:07

    Distinguish trading multiples from transaction multiples to value firms using market prices and acquisition prices, and note that transaction multiples include a control premium or acquisition premium on deals.

  • Key principles of relative valuation6:30

    Explore the key principles of relative valuation using multiples, including adjustments for conglomerates, capital structure, non-operating items, and careful peer group selection to improve precision.

  • Earnings multiples comparison (PE vs EV/EBITDA)5:31

    Compare earnings multiples—p/e and ev/ebitda—highlighting how p/e is easy to compute but distorted by debt, while ev/ebitda remains leverage-neutral, as shown in the two-company example.

Requirements

  • Basic corporate finance knowledge

Description

Learn how to perform multiples valuation

This is a practical framework used by investment bankers, financial analysts, and finance professionals to determine a range for a company's value.

This course blends theoretical knowledge with hands-on learning, equipping you with the skills to assess a firm's worth, whether for a quick assessment or a more comprehensive analysis.

We start by exploring the fundamentals of relative valuation and its underlying assumptions. Next, we'll dive into various valuation multiples, highlighting the distinction between trading and transactional multiples. Along the way, you'll become well-versed in key principles to ensure your analysis adheres to best practices in relative valuation.

The latter portion of the course delves into a real-world example of multiples valuation (performing multiples valuation on Volkswagen), demonstrating that achieving optimal accuracy requires careful consideration and time investment. You'll see first-hand that striking a balance between valuation precision and research time is crucial for success.

Since multiples valuation often complements the Discounted Cash Flow (DCF) valuation technique, our course encourages a best-practice approach by triangulating results from both methods to establish a reliable price range.

Whether you're an aspiring investment banker, analyst, or an established professional seeking to expand your skillset, our Multiples Valuation course is the perfect way to learn valuable new skills and boost your career.

Enroll today to learn how to perform multiples valuation. See you inside!

Who this course is for:

  • Aspiring investment bankers, financial analysts, finance professionals
  • Everyone who wants to learn how to value companies

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