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Private Company Valuations—A Complete Guide

Valutico

For example: For a private technology company, applying the average price-to-earnings (P/E) ratio of 20x to its earnings of $10 million would yield an estimated valuation of $200 million based on comparable company analysis. It indicates how much value the market assigns to each dollar of the company’s revenue.

article thumbnail

Private Company Valuations—A Complete Guide

Valutico

For example: For a private technology company, applying the average price-to-earnings (P/E) ratio of 20x to its earnings of $10 million would yield an estimated valuation of $200 million based on comparable company analysis. It indicates how much value the market assigns to each dollar of the company’s revenue.