Valuation - Using Public Trading Comparables (Trading Comps) to Value a Business
Using public company valuations to derive a valuation for a private business is a common technique. In this video I review a Microsoft Excel template that first builds the equity value by taking the share price multiplied by the shares outstanding. Then we arrive at Enterprise Value by computing net debt (debt less cash). We then take this enterprise value and divide it by revenue and EBITDA to arrive at TEV/Revenue and TEV/EBITDA multiples for these public companies.
#valuation #publiccompany #tradingcomps #enterprisevalue #revenuemultiple #ebitdamultiple #investmentbanking