Session 16: Other Earnings Multiples

Extend the discussion to look at operating earnings and EBITDA multiples and their determinants.

[@zexinlin414]

A really good professor who provides an insightful thinking for these finance models

[@andrewmaina8899]

Excellent stuff sir, thank you! Especially the finishing touch on infrastructure/trucking companies.

[@markpurol4471]

Your video has helped me see this process much more clearly! Thanks for the info.

[@heshanpalliyaguruge6333]

A true master at work. Thank you professor

[@TommyCarstensen]

Great example with Ryder System towards the end of the presentation!

[@rudimuller3869]

Thank you again for the explanation. I would really like to visit one of your classes!

[@unnatbajoria2898]

Great insights!

[@quant-trader-010]

This is gold!

[@rajeshsrivastava1728]

sir, what in case, the company is not listed, how to get the market value of equity

[@vijetarvindpatil7579]

Thanks Sir,

[@xcinvestment1231]

Slides available here: people.stern.nyu.edu/adamodar/pdfiles/valonlineslides/session16.pdf

[@vishwasmaheshwari1152]

At 1:45 in the FCFF formula, you also need to add Depreciation to FCFF, right ? I think u missed that

[@lingshyanchong3184]

Net Capex = Capex - Depreciation

[@angiewhiteley9767]

I'm so confused, in EV/EBITDA, where does tax come into the calculation? I thought one of the pros of this multiple was that it was useful in comparing companies subject to different tax rates because it used EBITDA not Earnings? How does a higher tax rate lead to a lower multiple?

[@pranavnagarkar6005]

It is not the ebitda but the EV or the way he has computed EV that has bought the tax rate into the picture

[@arulajoy8060]

dude , tax rates are used to calculate interest tax shields . which is added in enterprise value

[@pranavnagarkar6005]

@@arulajoy8060 I'm implying the same thing brother, though there's no tax implications in EBITDA but while considering EV we have to bring tax into the picture.

[@MrOsha7]

at 2:59 when he says that cash is netted out from debt because income from cash is not part of ebitda, does he mean interest earned on cash?

[@gauranggarg549]

I guess yes, because interest income and expenses are accounted for after arriving at EBITDA

[@Moose_fit_vlogs]

Sir, I really liked the video but I have a doubt! Don't you think EV/Free Cash Flow makes more sense if you are about to acquire a company as it tells you how many years or time period it will take to get back the price paid for acquisition. Infact, in case of LBO's it definitely makes more sense than EBITDA. I know there is different definition of Free cash flow and in many places it says the process of finding free cash flow is lumpy but overall don't you think it is better than taking EBITDA. What's your take on that?

[@romancandlefight1144]

1:50 "if you ever see a FCF to EV multiple I guarantee that it's not been done right"

[@elontusk9123]

7:40 No company can have continual growth higher than the long term GDP growth rate. Is this not an impossible example?

[@gregbattis2385]

Liquid gold

[@zekezhen1431]

The grubby gruesome factory supply attempt because chord spectacularly precede through a second diaphragm. sincere, divergent vermicelli