Category Archives: 1.3. Relative valuation

Deliveroo share price 247! Use Price to Sales Ratio.

Price to Sales Ratio

  Price to Sales ratio and EV/Sales ratio (Case study: share value analysis for Deliveroo, Just Eat and Delivery Hero)   Definition of Price to Sales Ratio (PSR or PS ratio)   PS ratio (PSR, Price to Sales Ratio) is a sales multiple in the relative valuation method. It tells how many times the share […]

Tesla PB ratio 36.3, Toyota 1.3! How to interpret this?

PB ratio - jcinus

  Understanding PB ratio (PBR) and comparing the stock price between Tesla and Toyota   What is the PB ratio (Price to Book Value Ratio)?   PB ratio (PBR, Price to Book Value Ratio) refers to how many times the book value of a company’s equity capital is evaluated in the market.   Investors will […]

EV/EBITDA 12! How should it be interpreted in acquisition valuation?

Acquisition valuation

  EV/EBITDA and Acquisition valuation – Case Analysis for Dell Computer   Why is EV/EBITDA suitable for acquisition valuation?   EV/EBITDA is a relative valuation method suitable for acquisition valuation.   That is because EV considers not only the equity value that the buyer should pay to the original owners but also the debt value […]

3 reasons why EV/EBITDA is useful for M&A valuation.

EV/EBITDA - jcinus

  Understanding and practical interpretation of EV/EBITDA   Knowing the difference between EV (Enterprise Value) and equity value is critically important for the use of EV/EBITDA. Suppose there are Flat A and B with the same price in London as shown in the figure below.   Flat A and B with the same price (to […]

Apple’s PER is 36! Is it high? Or low? Use of PEG

PEG ratio - JCinus

  Evaluating Apple’s 36x PER by the PEG ratio   Determining the stock price level with PER alone could lead to an error.   Suppose that firms A and B have the same business and that both equity capital and profits are the same for the latest fiscal year. All other factors are similar, except […]

How much is Dyson share price? £4million? (Included a Dyson valuation Excel template)

dyson share price - jcinus

  Valuation of Dyson share price by using PER   Dyson is a British technology company founded in 1991 by James Dyson. It designs and manufactures home electric appliances such as vacuum cleaners, air purifiers, hairdryers, bladeless fans, heaters and lighting. It is a global company beyond the UK that has expanded to Asia, Europe, […]

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 […]