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Valuation using multiples

 
 
ankurb
 
Reply Mon 17 Dec, 2012 01:00 am
While doing valuation using multiples for FY11 and FY12 the valuation of a firm comes out to be 10Mn, whereas if taken FY13 and FY14 multiple the valuation comes down as the multiples are in a decreasing trend. Whereas the Revenue, EBITDA, EBIT of the firm is on an increasing trend so valuation should also go up, but because the multiples are decreasing so the valuation is suffering.

1. Why the multiples (EV/Revenue. EV/EBITDA etc.) are on a decreasing trend?
2. How to increase the valuation of the firm?
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