EBITDA multiple and GFC: Difference between pages

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imported>Doug Williamson
(Create the page, as singular of EBITDA multiples page.)
 
imported>Doug Williamson
(Create the page. Source: MCT Reading 4.6.1 Financial Risks Arising from Ownership, p18, 1 March 2012.)
 
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1.
Global Financial Crisis.
A method of business valuation which is based on accounting Earnings before interest, tax, depreciation and amortisation (EBITDA) and the ratio of entity value to EBITDA of a comparable business (or a comparable group of businesses).


EBITDA mulitiple = Total value of firm ÷ EBITDA.


2.
For example if the total entity value of Company A is $750m and its relevant EBITDA is $150m, the EBITDA multiple = $750m/$150m = 5 times.


3.
== See also ==
In another case if comparable EBITDA multiples for an unlisted Company B are 6, and its relevant EBITDA is $30m, the total entity value of Company B's business can be estimated on this basis as 6 x $30m = $180m.


== See also ==
* [[Credit crunch]]
* [[Earnings multiples]]
* [[EBITDA]]

Revision as of 19:27, 5 September 2014

Global Financial Crisis.


See also