In this course, we’re going to take a deep dive into valuation multiples. Valuation multiples are ratios that measure how many times or “turns” investors are willing to pay for every dollar the company earns. They are the corporate finance equivalent of “Price per Square Foot” in real estate. Investors use multiples to evaluate whether the prices for a company are reasonable and to estimate how much the company will be worth in the future. By the end of the course, you’ll understand the common multiples (i.e. EV / EBITDA; P/E), timing considerations (i.e. forward vs. trailing) and their key drivers.
- Timing consideration
- Using multiples to project future value
- Drivers of multiples