Sunday, 30 April 2017

Price Multiples - Relative Valuation

Price multiples are ratios that compare the price of a stock to some sort of value.

Price multiples allow an analyst to evaluate the relative worth of a company's stock.

Popular multiples used in relative valuation include:

  • price-to-earnings,
  • price-to-sales,
  • price-to-book, and
  • price-to-cash flow.

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