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Valuation · All formats
Five comparable companies: A ($900M EV, $120M EBITDA), B ($750M EV, $100M EBITDA), C ($1,200M EV, $140M EBITDA), D ($600M EV, $90M EBITDA), E ($1,050M EV, $115M EBITDA). Your target has $105M of EBITDA, $150M of Debt, $45M of Cash, and 40M diluted shares. Calculate the median multiple and walk to an implied share price.
A company's Equity Value is $900M. It has Cash of $60M, Debt of $150M, a 25% Equity Investment stake carried at $40M on its Balance Sheet, and Noncontrolling Interests of $70M. What's its Enterprise Value?
It's currently November 2026. A company's full-year 2025 Revenue was $800M. Its Q1-Q3 2026 Revenue was $650M, and its Q1-Q3 2025 Revenue was $580M. Its Current Enterprise Value is $3,000M, and consensus estimates project full-year 2026 Revenue of $900M and full-year 2027 Revenue of $990M. Calculate the company's LTM Revenue, LTM TEV/Revenue multiple, and both forward TEV/Revenue multiples.
Your target company has $65M of EBITDA, and the median TEV/EBITDA multiple across its Comps is 9.2x. What's the target's implied Enterprise Value?
An airline has Enterprise Value (excluding Operating Leases) of $2,000M, on-Balance Sheet Operating Leases of $500M, EBITDA (under U.S. GAAP, deducting the full Lease Expense) of $300M, and Rent Expense of $80M. Calculate EBITDAR and both the TEV/EBITDA and (TEV Including Operating Leases)/EBITDAR multiples.
Walk me through the four steps of a Public Comps analysis.
Why do you need both Equity Value and Enterprise Value instead of just one?
Why does Goodwill never get subtracted in the Equity Value to Enterprise Value bridge?
A company collects $300M upfront from a customer for a service not yet delivered (recorded as Deferred Revenue). One year later, it delivers the service, recognizing the full $300M as Revenue along with $180M of Operating Expenses, at a 25% tax rate. Walk through the entire process and calculate the net change in Equity Value and Enterprise Value from start to finish.
A company issues $150M in Debt and uses the full proceeds to purchase $150M of Financial Investments (a Non-Operating Asset). By how much does its Enterprise Value change?
The median premium across a set of Precedent Transactions is 30%. Your target company's current share price is $14.00. What's its implied share price using the M&A Premiums method?
A company has $400M in Equity Value and Net Income to Common of $40M. What's its P/E multiple?
Four comparable companies have the following Enterprise Values and EBITDA: Comp A ($800M EV, $100M EBITDA), Comp B ($650M EV, $95M EBITDA), Comp C ($1,100M EV, $130M EBITDA), Comp D ($500M EV, $70M EBITDA). Your target has $110M of EBITDA. Calculate the median multiple and the target's implied Enterprise Value.
Why do you subtract only the Net Operating Losses within a company's Deferred Tax Asset, not the whole DTA, when calculating Enterprise Value?
A company has Enterprise Value of $600M and net debt of $80M. What's equity value?
A company has 150 million shares outstanding at a $12.00 share price. It has 30 million options outstanding at a $20.00 exercise price. What's its Diluted Equity Value?
A company trades at 12x TEV/EBITDA, with total EBITDA of $150M (Enterprise Value = $1,800M). It sells an Operating Asset contributing $30M of that EBITDA for 3.0x the Asset's own EBITDA. What's the company's new TEV/EBITDA multiple after the sale?
How does a Dividend Discount Model (DDM) differ from a DCF, and when is it most useful?
Why is it harder to draw clean conclusions from Precedent Transaction multiples than from Public Comps multiples?
A Parent Company has an Equity Value of $420M, Cash of $30M, Debt of $90M, and a Noncontrolling Interest of $45M on its Balance Sheet (representing the portion of a majority-owned Subsidiary it doesn't own). It also holds a 20% Equity Investment in a separate Associate Company, carried at $25M on its Balance Sheet. Calculate the Parent's Enterprise Value, and explain why the NCI and Equity Investment adjustments point in opposite directions.
Why do Precedent Transaction multiples tend to be higher than Public Comps multiples for similar companies?
Why might you use an M&A Premiums analysis to value a company, and what's a key limitation?
An acquirer buys 60% of a company for $420M. What's the implied Purchase Equity Value for 100% of the company?
Could a company's Implied Equity Value or Implied Enterprise Value ever be negative?
What is a comparable companies analysis?
What is a precedent transactions analysis and how does it differ from a comparable companies analysis?
Why would you use EV/EBITDA instead of P/E as a valuation multiple?
A company's fiscal year ends March 31st, with full fiscal-year EBITDA of $108M. Its March-December results this year were $91M of EBITDA, and the same March-December period last year was $73M. Calendarize its EBITDA to a December 31st basis, then apply a 7.0x multiple to estimate Enterprise Value.
A company has an Equity Value of $500M, Cash of $80M, Debt of $220M, and Preferred Stock of $40M. What's its Enterprise Value?
Debunk the myth that Debt "adds to" Enterprise Value and Cash "subtracts from" it.
How do you build a Future Share Price Analysis, and when is it useful?
What's the difference between Basic Equity Value and Diluted Equity Value?
What's the core difference between an intrinsic valuation method like a DCF and a relative valuation method like Public Comps?
A company issues $100M of Debt and does nothing with the proceeds. How do Equity Value and Enterprise Value change?
Why is it not arbitrary to pair Net Assets with Common Shareholders (Equity Value), but Net Operating Assets with All Investors (Enterprise Value)?
Why are valuation multiples and growth rates often not as correlated as you'd expect, even among similar companies?
Why look at both historical (LTM) and projected (forward) multiples in a Comps analysis, rather than just one?
What are the advantages and disadvantages of a Sum-of-the-Parts valuation?
A company records a $150M Goodwill Impairment and simultaneously issues $60M of Debt to help fund future growth, at a 25% tax rate. Calculate the net change in Equity Value and Enterprise Value.
Two companies have the same amount of Debt, the same Operating Income, the same tax rate, and the same Equity Value, but one has Convertible Debt and the other has traditional Debt. Which company has the higher P/E multiple, and why?
Why would a company's own management team view the same Football Field differently than a hostile acquirer would?
What are the tradeoffs between TEV/EBITDA, TEV/EBIT, and P/E as valuation multiples?
What are the three main valuation methodologies?
A company issues $150M of Preferred Stock to fund a $150M Common Stock repurchase. How do Equity Value and Enterprise Value change, and why is this a useful counter-example to the "Net Assets" shortcut?
What are the main ways Precedent Transactions differ from Public Comps in how you screen and calculate them?
A company has an Enterprise Value of $1,200M, Revenue of $600M, EBITDA of $200M, EBIT of $150M, and Net Income to Common of $80M. Its Equity Value is $900M. Calculate TEV/Revenue, TEV/EBITDA, TEV/EBIT, and P/E.
A company's most recent fiscal-year (annual) Revenue was $550M. Its most recent interim period this year was $310M, and the same interim period last year was $275M. What's its LTM Revenue?
Walk me through how you'd calculate enterprise value from equity value.
Why do you always use a company's Current Equity Value or Current Enterprise Value in Comps multiples, never a 'projected' future value?
What is a Liquidation Valuation, and why does it usually understate the value of a healthy, growing company?
How do you decide whether to pair a valuation metric with Equity Value or Enterprise Value?
How do you pick comparable companies for a comps analysis?
An acquirer buys 70% of a company for $350M. What's the implied Purchase Equity Value for 100% of the company?
Your target's EBITDA is $140M, and the median Comps multiple is 7.5x. It has $200M of Debt, $60M of Cash, and 50M diluted shares. Walk from the multiple to an implied share price.
A company has 2 million shares outstanding at an $80.00 share price. It has $15 million of convertible bonds with a $60.00 conversion price. How many new shares would the bonds create if converted?
Could a company's Current Equity Value ever be negative? Could its Current Enterprise Value?
Why do you 'calendarize' companies with different fiscal year-ends before comparing their multiples?
Why do you typically use median multiples rather than average multiples when summarizing a set of Comps?
A company has 200 million shares outstanding at a $15.00 share price. It has 20 million options outstanding at a $9.00 exercise price. What's its Diluted Equity Value, using the Treasury Stock Method?
What is the 'Football Field' chart used for in a valuation, and why use a range instead of a single number?
A company's Current Enterprise Value is $2,000M. Its Year 1 forward EBITDA estimate is $250M. What's its Year 1 forward TEV/EBITDA multiple?
A company has 20,000 shares outstanding at a $25.00 share price. It has 200 options outstanding at a $15.00 exercise price, 150 RSUs outstanding, and 300 convertible bonds outstanding, each with a $150 par value and a $20.00 conversion price. It also has Cash of $50,000, Debt of $180,000, and Noncontrolling Interests of $60,000. Calculate its Diluted Equity Value and its Enterprise Value.
How can an LBO analysis be used as a standalone valuation check, separate from its use as a private equity returns model?
Are there rules about including deals for less than 100% of a company, or about stock vs. cash consideration, when building a set of Precedent Transactions?
An acquirer buys 85% of a company for $680M. The seller's most recent Balance Sheet shows $120M of Debt and $40M of Cash, and its LTM EBITDA is $95M. Calculate the implied TEV/EBITDA multiple.
Why do you never project Equity Value or Enterprise Value forward when calculating forward multiples?
A company has Pension Liabilities of $300M and Pension Assets of $220M. Contributions are tax-deductible at a 25% tax rate. How much should be added to Enterprise Value for this pension?
Why doesn't Enterprise Value actually hold up as fully "capital-structure-neutral" in real life?
Should you generally include expected synergies from a deal when calculating Precedent Transaction multiples?
A company issues $80M in Common Stock and uses the full proceeds to acquire a factory (an Operating Asset) for $80M. By how much does its Enterprise Value change?
What does it mean if your target company's growth rates and margins are in line with its Comps, but it trades at noticeably lower multiples?
A company has an Enterprise Value of $1,400M and EBITDA of $175M. What's its TEV/EBITDA multiple?
Why do you typically look at both a sales-based multiple and one or two profitability-based multiples in Comps and Precedent Transactions, rather than just one?
An acquirer buys 65% of a company for $500 million. How do you use this to calculate the deal's valuation multiples?
Your target company has $90M of EBITDA, and the median TEV/EBITDA multiple across its Comps is 7.5x. What's the target's implied Enterprise Value?
A company's Deferred Tax Asset includes $80M of Net Operating Losses. It has recorded a Valuation Allowance equal to 25% of that NOL balance. How much of the NOLs should you subtract in the Enterprise Value bridge?
What's the difference between equity value and enterprise value?
An acquirer buys 90% of a company for $810M (paid in a mix of cash and stock). The seller's LTM Revenue is $260M and LTM EBITDA is $78M. Its most recent Balance Sheet shows $95M of Debt and $30M of Cash. Calculate the implied TEV/Revenue and TEV/EBITDA multiples.
A company's share price was $20.00 before a deal was announced, and the acquirer offered $27.00 per share. What premium did the acquirer pay?
A company has excess Cash. How do Equity Value and Enterprise Value change if it uses the cash to repay Debt versus repurchase Common Stock?
A company has 400,000 basic shares outstanding. Its Treasury Stock Method calculation for options yields 15,000 net new shares, and it also has 25,000 RSUs outstanding. What's its Diluted Share Count?
A company's most recent fiscal-year (annual) Revenue was $400M. Its most recent interim period this year was $220M, and the same interim period last year was $190M. What's its LTM Revenue?
A company announces it now expects 20% revenue growth instead of 10%. How does this affect its Current and Implied Equity Value and Enterprise Value?
What do Equity Value and Enterprise Value actually mean? Don't explain how to calculate them, explain what they mean.
Why should you never screen Comparable Companies using both a financial metric (like Revenue) and a valuation metric (like Enterprise Value) at the same time?
A company's fiscal year ends June 30th. Its full fiscal-year Revenue was $300M. The June 30th-December 31st period this year was $170M, and the same period last year was $150M. What's its calendarized (December 31st) Revenue?
Debunk the myth that Enterprise Value represents the "true cost to acquire a company."
A company's share price was $35.00 before a deal was announced, and the acquirer offered $42.00 per share. What premium did the acquirer pay?
A CEO finds $200M of cash on the street and deposits it in the company's bank account (ignore taxes for simplicity). How do Equity Value and Enterprise Value change?
It's currently August 2026. A company's full-year 2025 EBITDA was $400M. Its Q1+Q2 2026 EBITDA was $230M, and its Q1+Q2 2025 EBITDA was $190M. What's its LTM EBITDA?
Why do you subtract Cash when moving from Equity Value to Enterprise Value? Is it because Cash is "the opposite" of Debt?
Why is it invalid to pair plain Net Income with (Equity Value + Preferred Stock), even though the numerator and denominator technically "match" mathematically?
Why do you subtract Equity Investments but add Noncontrolling Interests when moving from Equity Value to Enterprise Value? Why do the two adjustments point in opposite directions?