The multiples valuation method estimates the relative value of a company by comparing it to similar ones in the same industry. It uses key financial metrics such as earnings and revenue, and some of the most popular types include transaction and trading multiples.
A relative valuation is only as good as the quality of the peer group selected, so you’ll need to prepare a solid list of comparable firms.
Our open-access course notes are an excellent resource for bankers, corporate executives, portfolio managers, financial analysts, business analysts, data analysts, and finance students.
What are the fundamental principles of relative valuation? Learn how to value companies through practical examples in our Multiples Valuation course.
You can also download our free Excel templates on key financial metrics, including Enterprise Value (EV), EBITDA, EV to EBITDA, and Discounted Cash Flow Valuation.
