article thumbnail

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

Valutico

Below, we outline what this method is, the different ways it works as well as key considerations when using this approach to value a company. A financial ratio (or ‘multiple’) observed from these peer companies is applied to the company that is being valued.

EBITDA 52
article thumbnail

Your Guide to Valuing a Company Using the Multiples Approach

Valutico

Valuation Using Multiples – Your Guide to Valuing a Company Using the Multiples Approach. Below, we outline what this method is, the different ways it works as well as key considerations when using this approach to value a company. Simple approach to value a company.

EBITDA 52
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Delaware Supreme Court Decides DFC Global Appeal**

Appraisal Rights

In addition, the Supreme Court denied the cross-appeal, by which the stockholders argued that the DCF analysis be given primary, if not sole, weight in the valuation analysis.

article thumbnail

DCFs Yield Lowest Valuation of Multiple Methods – Evidence From Slovakia

Appraisal Rights

In this paper, published in 2015 in Investment Management and Financial Innovations , the authors examined multiple valuation methods for a specific data set: in this case, Slovakian mining companies.

article thumbnail

A Look at Tax Valuation in Action

Appraisal Rights

In prior posts, we have explained various valuation concepts, including the discounted cash flow (DCF) and comparable company analyses. The Tax Court considered both a DCF analysis and a comparable companies analysis from two competing experts.

article thumbnail

Top Methods CPAs Use to Determine a Business’ Value

Shuster & Co.

Whether you are seeking new investors, merging with another company, considering selling your business, getting a divorce, or doing estate planning, you may need to determine the economic value of your business. The expert team at Shuster & Company, P.C.

article thumbnail

Breaking Down the Delaware Supreme Court’s DFC Global Decision**

Appraisal Rights

In its valuation decision, the chancery court examined three metrics – deal price, comparable companies, and a discounted cash flow analysis – and gave equal one-third weight to each of those inputs. In addition, the Supreme Court disagreed with chancery that a financial buyer – such as Lone Star, the private equity buyer here – would perform a valuation analysis that was necessarily lower than that done by a strategic buyer.

article thumbnail

The 7 Key Questions to Consider Before Buying a Small Business

Equilest

Income statement: It shows the company's revenue and expenses, as well as its net profit or loss over a specific period of time. This will give you an idea of the company's profitability and whether it generates positive cash flow. Balance sheet: It shows the company's assets and liabilities, as well as its net worth, at a specific point in time. This will give you an idea of the company's financial position and its ability to meet its obligations.

article thumbnail

Supreme Court Hears Arguments in DFC Global**

Appraisal Rights

The court observed that the appraisal statute requires the courts to focus on the fair value of the shares and that the pre-existing, unaffected market price would be highly informative of the stock’s fair value, but the jurisdictional definition of fair value looks beyond just the shares to the value of the company as a going concern. The Supreme Court heard argument yesterday from DFC Global and its dissenting stockholders.

article thumbnail

SWS Group: The Breakdown

Appraisal Rights

Further to our prior post about Delaware’s two new appraisal decisions, SWS Group was a small, struggling bank holding company that merged on January 1, 2015 into one of its own substantial creditors, Hilltop Holdings. Vice Chancellor Glasscock rejected the sale price as an unreliable indicator of fair value and performed his own DCF analysis, setting the fair value at $6.38, a price 7.8% The court undertook its own DCF analysis, on which it relied exclusively.