Section 1 - Instruction

So far, you've learned about multiples, the difference between Enterprise and Equity value, and how to find comparable companies. Now, let's put it all together in practical scenarios.

Engagement Message

How confident are you in picking a good comparable company?

Section 2 - Practice

Type

Fill In The Blanks

Markdown With Blanks

Let's practice another Enterprise Value calculation.

A company's Equity Value is $500M. It has $150M in total debt and $50M in cash on its balance sheet.

Its Enterprise Value is $500M + $150M - [[blank:50M]]=[[blank:50M]] = [[blank:600M]].

Suggested Answers

  • $50M
  • $600M
  • $150M
  • $700M
Section 3 - Practice

Type

Swipe Left or Right

Practice Question

You are valuing a US-based, high-growth, social media company with $5B in revenue. Swipe these potential comparisons left for "Good Comp" or right for "Poor Comp".

Labels

  • Left Label: Good Comp
  • Right Label: Poor Comp

Left Label Items

  • A US-based social media peer with $8B revenue
  • A European social media firm with $4B revenue
  • A fast-growing US digital advertising company

Right Label Items

  • A slow-growing US television broadcaster
  • A large, profitable industrial manufacturer
  • A small, local US newspaper company
Section 4 - Practice

Type

Multiple Choice

Practice Question

An analyst is valuing a very unique company with no direct public competitors. What is the LEAST effective strategy?

A. Use a broader industry average multiple.
B. Use precedent transaction analysis from related sectors.
C. Force a comparison with a poorly matched company.
D. Expand search criteria to similar business models.

Suggested Answers

  • A
  • B
  • C - Correct
  • D
Section 5 - Practice

Type

Sort Into Boxes

Practice Question

Sort these factors based on their importance when selecting comparable companies.

Labels

  • First Box Label: Critical Factor
  • Second Box Label: Secondary Factor

First Box Items

  • Same industry
  • Similar size
  • Similar geography

Second Box Items

  • Same CEO tenure
  • Similar stock price
  • Same founding year
Section 6 - Practice

Type

Multiple Choice

Practice Question

You are valuing a profitable, asset-light software company with minimal debt. Which combination of multiple and comparable criteria is most appropriate?

A. P/B ratio, focusing on asset-heavy comps. B. EV/Sales ratio, focusing on unprofitable comps. C. P/E ratio, focusing on comps with similar growth. D. EV/EBITDA, focusing on debt-heavy comps.

Suggested Answers

  • A
  • B
  • C - Correct
  • D
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