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Valuation Using Multiples—What Is It and How Does It Work? Core Ideas Explained

Valutico

Valuations using multiples is one of the three main approaches to valuing a business, sometimes referred to as the ‘market-based approach’. The first is comparable company analysis (CCA), also known as “comps”. The second is precedent transaction analysis, known as “precedents” and also called a comparable transaction analysis (CTA).

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Your Guide to Valuing a Company Using the Multiples Approach

Valutico

Valuations using multiples is one of the three main approaches to valuing a business, sometimes referred to as the ‘market-based approach’. The first is comparable company analysis (CCA), also known as “comps”. The second is precedent transaction analysis, known as “precedents” and also called a comparable transaction analysis (CTA).

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How to Value a Website or Internet Business in 2022

FE International

With the comparable transactions method, you are looking for comparable metrics, usually multiples of earnings or revenue. That is, were the companies in those transactions valued as a multiple of EBIT , EBITDA , revenue, or some other parameter? It is important to identify the key valuation parameter for each deal.