Module II· Football Field & SensitivitiesAdvanced
Question
When should you exclude a valuation method from the Football Field?
Answer
Exclude a method when:
- The data is too thin (e.g. precedents with <3 comparable deals → the median is not robust).
- The method is structurally inappropriate (DCF for a distressed name; comps for unique business models with no pure-plays).
- The range is too wide (e.g. comps show 4x–18x EV/EBITDA → the method is 'broken').
- The method would mislead (LBO for a public-trade mandate with no take-private intent). In the pitch: justify the excluded method in a footnote — 'LBO not applicable, target structure does not support typical PE ownership'.
Deep diveShow more details
Pitch tip
Better three robust methods than five with one shaky one — senior MDs know that weak methods can delegitimize the entire valuation.