Relative Valuation Methods with Price Multiples: Price-to-Sales Ratio Price-to-Cash Flow Ratio Price-to-Book Ratio What are the benefits and disadvantages...

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Finance

Relative Valuation Methods with Price Multiples:
Price-to-Sales Ratio
Price-to-Cash Flow Ratio
Price-to-Book Ratio
What are the benefits and disadvantages of these methods?
Would you ever use any of them as stand alone valuation methodsof a target company?

Answer & Explanation Solved by verified expert

4.2 Ratings (932 Votes)

Price to sales Advantages 1 One can calculate for distressed firm because sales cant be negative 2 Sales revenue not easily manipulated 3 useful for mature cyclical and startup firm since it sales value is always there See Answer

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Relative Valuation Methods with Price Multiples: Price-to-Sales Ratio Price-to-Cash Flow Ratio Price-to-Book Ratio What are the benefits and disadvantages...

90.2K

Verified Solution

Question

Finance

Relative Valuation Methods with Price Multiples:
Price-to-Sales Ratio
Price-to-Cash Flow Ratio
Price-to-Book Ratio
What are the benefits and disadvantages of these methods?
Would you ever use any of them as stand alone valuation methodsof a target company?

Answer & Explanation Solved by verified expert

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Relative Valuation Methods with Price Multiples: Price-to-Sales Ratio Price-to-Cash Flow Ratio Price-to-Book Ratio What are the benefits and disadvantages...

90.2K

Verified Solution

Question

Finance

Relative Valuation Methods with Price Multiples:Price-to-Sales RatioPrice-to-Cash Flow RatioPrice-to-Book RatioWhat are the benefits and disadvantages of these methods?Would you ever use any of them as stand alone valuation methodsof a target company?

Answer & Explanation Solved by verified expert

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Relative Valuation Methods with Price Multiples:
Price-to-Sales Ratio
Price-to-Cash Flow Ratio
Price-to-Book Ratio
What are the benefits and disadvantages of these methods?
Would you ever use any of them as stand alone valuation methodsof a target company?