Calculator · Market approach cross-check

Valuation multiples cross-check

Apply industry or guideline-company multiples (EV/EBITDA, EV/EBIT, EV/sales, P/E, P/BV) to the subject's normalised figures for a range of value indications that cross-checks a DCF.

How the multiples cross-check works

The calculator applies Damodaran's aggregate industry multiples for the chosen region and data update to your company's revenue, EBITDA, EBIT, invested capital, net income and book value, deducts net debt from the enterprise-value indications, and reports the median, low and high equity values. Up to four business segments can be weighted, or valued as a sum of the parts with each segment's own figures; a financial segment is valued on equity multiples. Instead of the industry aggregates you can enter your own guideline companies: the tool then applies their median or quartile multiples and shows the peer range of each indication.

Industry multiples describe listed companies on a marketable minority basis, so adjust for differences in growth, profitability, risk, size and marketability before relying on any of them (IVS 103 para A10.14; discounts and premiums, para A10.17). A comparability check sets the subject's EBITDA margin, sales and EBITDA to invested capital and return on equity against the ratios implied by the industry multiples themselves, and the basis for any adjustment is recorded in the input register. Non-controlling interests, non-operating assets and debt-like items are left to the equity bridge, because Damodaran's enterprise value deducts cash only. The subject's figures can be normalised, the lease basis of EBITDA is checked, the industry multiples can be moved with a market index to the valuation date, and a fundamentals-based helper sizes the adjustment from growth, return on capital and cost of capital.

Related: Equity bridge calculator · Terminal value calculator · DLOM calculator · Model notes

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