Valuation using Multiples

This video explains how to value a firm using multiples of comparable firms. Whereas other valuation techniques (such as the Dividend Discount Model, Total Payout Model, or Discounted Cash Flow Model) rely on future cash flows to value a firm, valuing a firm with firms does not require the forecasting of cash flows and is performed using multiples (such as the P/E ratio) of other firms to determine the value of the firm in question. This video provides a comprehensive example to illustrate how a firm is valued using the P/E ratio of a comparable firm.
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[@taumafoko]

Thank you very much. Your videos helped me through my CTA.

[@akotofiq8394]

always love your videos. very easy to understand. 🙏🏻

[@mfanafuthifortunenene2792]

Thanks this really,your videos assists me in getting the logic behind finance topics

[@Edspira]

no problem. thanks for watching!

[@tlegoo]

is there a part 2 coz it just stopped randomly

[@anyu8191]

thanks!!! really help me understand PE ratio

[@willfindjr]

Great explanation!!

[@vanderdossantos6676]

Thank you. Really good explanation.

[@Edspira]

Thanks!

[@enochk.9726]

Very helpful. I thought I was listening to Ira Flatow from Science Friday lol

[@user-pi3sb2fl8k]

I am looking for an example using balance sheet multiples.

[@StayPolishThinkEnglish]

Damn. You explain it like for idiots. I love it :D it's good for a revision. thanks a bunch! Staying with you :) It only solidifies the fact you exactly know what you're doing period.

[@lucasamorim5506]

very helpful!

[@Edspira]

Thanks!

[@vidushisinghal1334]

How do I know the earnings per share before the firm was publicly traded?

[@Edspira]

The firm still issues financial statements even though it isn't publically traded. It can also have private stock that is not sold on any exchange. You would basically have to get access to the company's financial statements in order to calculate EPS. Here's a video on how to calculate EPS: kzbin.info/www/bejne/aXLShGl_rb-ZY9U Thanks for watching!

[@HLmilkcarton]

WHAT ABOUT USING MANY COMPARABLES THEN HOW DO I VALUE??????????????

[@CrystalCalliou]

You would run this calculation separately on each comparable, then take a simple average.

[@skipsassy1]

behavioral finance is the best way to stay out of trouble! You can never know the future of valuations - that's all nonsense. Cisco 3/10/20 217 p.e. 50,000% gain since IPO 1990 - 2 years later stock at $7.50. 17 years stayed below 30. IPO 1990 aftermarket interest zero. Kills fancy accounting p.e. forwards. There was no industry when the best time to buy p.e. was 40 and went up in 1999 p.e. 75! Should have been going lower the larger the company got. Investors? sorry, speculators (an investor is guaranteed fixed contract rate over current capital) P.e is just showing the behavior of the market in time.