With Valuations all over the place, what is the best valuation methodology?
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by a searcher
from Coastal Carolina University
in Los Angeles, CA, USA
in Los Angeles, CA, USA
5yrs ago
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by a searcher
5yrs ago
from New York University in New York, NY, USA
from New York University in New York, NY, USA
Most people use a Free Cash Flow or EBITDA multiple in the search fund. I think for small sized business that these valuation metrics work fine. If the business is a bit heavier on the asset side, you can run a NAV from the balance sheet.
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by a searcher
5yrs ago
from Massachusetts Institute of Technology in New York, NY, USA
from Massachusetts Institute of Technology in New York, NY, USA
In corporate M&A in some industries, the methodology is to combine and 'triangulate' valuation applying: Public industry comps. (i.e. P/E ratios) + DCF for the target + Private industry comps. where known. You can also apply an EBITDA multiple to get a ROM estimate.
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