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Valuation
Measuring and Managing the Value of Companies
5th Edition
Chapter 14 Solutions
Using Multiples to Triangulate Results
Version 1.0
April 1, 2010
Chapter 14
Questions 1 & 2
$ million Company 1 Company 2 Company 3
EBITDA will be lower for Company 1 if the company outsources
Operating income production. This causes its enterprise-value-to-EBITDA
Multiples
1 Also known as net enterprise value
Chapter 14
Questions 3 & 4
Driver Company A Company B Company C Other input
Company A versus Company B
Company A versus Company C
Chapter 14
Question 5
If future cash Cows (and the cost of capital) are the same for two companies, their valuations will be the same. If one
Chapter 14
Question 6
All
Income statement equity Levered Other inputs
Enterprise value
$ million
Company 1 Company 2 Company 3
Market data
Operating pro&t
Exhibit 14.12 Multiples Analysis: Market and Pro&t Data
