Company to Comparable Companies

be valued:
A B C
EBITDA 5,000 11,000 17,352
less depreciation and amortization 1,000 3,300 3,001
EBIT 4,000 7,700 14,351
less interest 500 1,000 3,000
EBT 3,500 6,700 11,351
Tax 900 2,000 2,760
NI 2,600 4,700 8,591

Market capitalization To be calculated 43,126 82,650

Value of debt (or use book value as a proxy) 6,192 16,350 40,000
Enterprise value To be calculated 59,476 122,650

EV/EBITDA multiple 5.4 7.1

EV/EBIT multiple 7.7 8.5
P/E multiple 9.2 9.6
Share in private placement 10,000

We would need to understand why the multiples

so much less than the other companies, and tho
are so much higher.
The numbers may need to be adjusted once we
understand them.

TO VALUE COMPANY A

Enterprise
Less debt
value
On an EBITDA multiple basis, EBITDA x mean EBITDA multiple 40,993 6,192
On an EBIT multiple basis, EBIT x mean EBIT multiple 39,268 6,192
On a P/E basis, net income x mean PE

On an EBITDA multiple basis, EBITDA x harmonic EBITDA multiple 37,689 6,192

On an EBIT multiple basis, EBIT x harmonic EBIT multiple 37,409 6,192
On a P/E basis, net income x harmonic PE

On an EBITDA multiple basis, EBITDA x median EBITDA multiple 35,342 6,192

On an EBIT multiple basis, EBIT x median EBIT multiple 34,186 6,192
On a P/E basis, net income x median PE
 Arithmetic Harmonic
Comparable Companies Median
mean mean
D E F
6,238 4,819 7,000
826 500 1,231
5,412 4,319 5,769
700 200 100
4,712 4,119 5,669 P/E = P/EPS=(P*N)/(NI/N)(N)=MC/NI
1,100 1,111 1,567
3,612 3,008 4,102

45,975 58,452 46,108

10,153 2,875 1,450
56,128 61,327 47,558

9.0 12.7 6.8 8.2 7.5 7.1

10.4 14.2 8.2 9.8 9.4 8.5
12.7 19.4 11.2 12.4 11.6 11.2

ed to understand why the multiples for B are

than the other companies, and those for E
higher.
may need to be adjusted once we
hem.

Value of Price per

equity stock
34,801 3.48 We are assuming that Cash = 0 for all companies
33,076 3.31 Note that the three sets of multiples give three different answers.
32,343 3.23 This is to be expected, as the market has not set any of these
prices on a 'scientific' basis. However, harmonic means are better
31,497 3.15 when we are dealing with ratios
31,217 3.12
30,098 3.01 Stock Price (Harmonic mean) 3.09

29,150 2.91
27,994 2.80
29,225 2.92
Example Harmonic Mean

Comparable Companies

B C D E F
P/E 9.2 9.6 12.7 19.4 11.2