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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

This approach relies on analyzing the market value of comparable publicly traded companies, known as guideline companies or multiples. By comparing key financial metrics such as price-to-earnings (P/E) ratios, price-to-sales (P/S) ratios, and price-to-book (P/B) ratios, analysts can estimate the target company’s value.

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M&A Valuation Methods: Your Essential Guide with 7 Key Methods

Valutico

Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value.