Module II· Interview Essentials — ValuationBasic
Question
Walk me through Trading Comparables.
Answer
1-minute answer
- Identify the peer group: 8–12 comparables (business, size, geography)
- Gather data: market cap, net debt, LTM + NTM EBITDA, net income
- Compute multiples: EV/EBITDA, EV/Sales, P/E
- Statistics: median, mean, 25th/75th percentile
- Apply to the target: e.g. EBITDA median 11x × target EBITDA $50m = implied EV $550m
- EV − Net Debt = Equity Value
Adjustments to mention
outliers, size/margin differences, the forward-vs-LTM choice.
Pitch tip
'I'd typically apply both LTM and NTM multiples and triangulate the range.'