Multiples and adjusted ratios
- Enterprise Price/ Tax-shield adjusted EBI: 24
- Enterprise Price / EBI : 24
- Enterprise Price / EBIT : 15
- Enterprise Price / EBITDA: 10
- *** Interest/EBITDA: 0%
- Enterprise Price / Sales: 1.3
- Stock price / sales: 1.3
*** Gross margin : 30%
*** Operating Margin: 9%
*** EBITDA/Sales: 13%
Sensitivity of gross margin and SG&A% to sales
- AVG Gross margin changes/sales growth (for every 1%): 1%
- AVG SG&A changes/sales growth (for every 1%): -1%
2016 2017 2018 (annualized)
- Growth in net sales: 0.4% 8.6% 6.8%
More Detailed and Customized Work Offered
With our financial consulting and investment advisory service, we provide, based on our philosophy of relativity in microeconomy, customized analysis of corporate operation and as well pricing, valuation or due-diligence covering PE,M&A, and distressed asset/debt.
Try our service? Contact us by clinking button on the right.
Philosophy of Pricing of Enterprise
Investment in PE (including M&A) needs a guarantee for predictable after- transaction cash inflow. The ideal PE target company should be a mature business with stable sales and consistent costs management &controlling (margin above some certain level), and with a similar-peers price/cash flow multiple (after considering sales growth trend and sensitivity of margins). and with a relative lower margin.
We think the profit or positive return from PE investment comes from extra cash inflow, on the basis of cash inflow before transaction, by highly efficient production optimization and/or innovative reallocation of operating resources. Therefore, we hope the ideal target company's margin should be above some certain level but close to bottom of that level.
For investment in distressed equity or its debt, we think the same principle should be followed ( for example, a positive EBI may be the margin level for equity investor and as well debt investor to apply multiples).
See more details from our websites post “ How to evaluate PE and distressed equity/debt?".