ABFM: Concepts and Practice · Part C: Valuation, Mergers and Acquisitions

Chapter 16: Relative valuation

Valuing a business by what similar ones are worth: P/E, PEG, P/B and EV/EBITDA, and how to choose and adjust a multiple.

Open Chapter 16 in the e-book The book and its prices

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

16.1The idea and the stepsp. 213
16.2Equity multiplesp. 214
16.3Enterprise value multiplesp. 215
16.4Choosing and adjusting multiplesp. 216
16.5Book value, transactions and pitfallsp. 217
Exam traps and quick checksp. 218
Practice: 16 questions in three roundsp. 219
Answers, with every wrong option explainedp. 221
Make it stickp. 223
Chapter 16 on one pagep. 224

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.