Trading Multiples
Short definition
Trading multiples are EV/EBITDA, P/E, EV/sales turns taken from listed peers’ current market prices. They are a minority, liquid share price; they do not include a control premium.
Detailed explanation
Spot price / LTM or NTM earnings. Market liquidity and a one-day shock move the multiple. The forward denominator is an analyst forecast.
In a control deal, add a control premium to the trading multiple or switch to transaction multiples. Mixing the two leaves price low.
Why it matters for the CFO
Daily screens and listed-company reports use this set. An SPA control price is another set.
How to read it
Trading 7x, deals 9x: 2x may be control and synergy — split them.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.