Category Archives: M&A Deal Process

How to use PE ratio to value a private company?

PE Ratio - JCinus

  PE Ratio and Private company stock valuation   Definition of PE Ratio   PE ratio (PER or Price Earnings ratio) is most often used in relative valuation. PE ratio multiple methods are used when an analyst evaluates a listed company’s share price, when a venture capital firm invests in a private company, and when […]

2 things to keep in your mind for the market approach model!

  Market Approach Model, Selection of Comparable companies, and Calculation of Valuation Multiples   The market approach model (relative valuation) is useful when estimating a private company’s market value. The way is to estimate the market value of a target company by referring to a market multiple of listed companies on the stock market similar […]

Why analysts prefer relative valuation multiples?

valuation mutiples - jcinus

  Types and uses of the Relative Valuation Multiples   The relative valuation model is a method of indirectly estimating or judging the market value of a target company by referring to the market price of comparable companies that have similar properties to the target company. The numerator’s market price in the formula below can […]

How to do present value calculation easier?

present value calculation - jcinus

  The Basic of DCF Model (Discount Cash Flow): Present Value Calculation of Future Cash Flows   It is essential to convert future cash flows into today’s value for business valuation. The value of $100 that companies create today is different from $100 expected in five years.   Cash flows after five years may have […]

Business valuation methods – types and practical use

valuation of a company - jcinus

  The methods for valuation of a company   You can classify company valuation methods by several criteria. One of the criteria is to classify them based on whether you value the target company with its own financial status or its comparable companies’ market prices. The former is called the absolute valuation (or intrinsic valuation) […]

What are the roles of company valuation?

investment decision making

Company valuation for investment decision making   Company valuation purpose   Company valuation is an essential task to evaluate the current price level or to determine the initial market price. Let’s look at the formula below to see how important company valuation is.   Return on investment = Pt / P0 P0: Purchase price of […]

PSR Valuation of Deliveroo, Just Eat, and Delivery Hero

How to use PSR with the key fundamental factor to value companies   Key fundamental factors in intrinsic multiples Among the fundamental factors that make up each intrinsic (or theoretical) multiple in relative valuation, the key critical factor is as follows.   Multiples Main Fundamental Factor PER Expected growth rate in EPS EV/EBITDA Reinvestment rate […]

What is PSR? What companies you can apply it to?

Valuation for a growing or venture firm with a deficit or under capital erosion   Why analysts use PSR? PSR is the stock price divided by sales. It is a good multiple to apply to a new technology or a venture firm that has grown in sales but are not making profits yet. You can […]

PBR Valuation of Telecom Companies via Regression

Stock valuation of Telecom companies through PBR regression analysis   Value investors have traditionally chosen stocks with low PBR. It is said that Benjamin Graham, author of “The Intelligent Investor” considered stocks with PBR of less than 2/3 as one of the investment criteria.   One of the ways to use PBR is to compare […]

PBR and Evaluating the Stock Price of Tesla and Toyota

PBR (Price to Book Value Ratio) refers to how many times the market evaluates about the book value of equity for a company. The market will trade it at a higher price when it expects the company to generate more cash flows with equity capital in the future. Suppose company A and company B have […]

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