18 Questions
What do Selling, General, and Administrative (SG&A) expenses include?
Rent, utilities, legal fees, and insurance
What does Earnings per Share (EPS) measure?
Each common share's profit allocation
How is Stockholders Equity calculated?
Assets - Liabilities
In events of liquidation, who receives payments first?
Debt holders
What is the purpose of Comparable Company Analysis (Public Comps)?
To compare a company's financials with similar public companies
What is the key metric used to determine the common shareholder's portion of the company's profit?
Earnings per Share (EPS)
What does EV/Revenue stand for in valuation analysis?
Enterprise Value to Revenue
In the EV/EBITDA ratio, what does EBITDA represent?
Earnings Before Interest, Taxes, Depreciation & Amortization
What is the main purpose of using P/E ratio in comparable company analysis?
To compare a company's market price per share with its earnings per share.
What does the P/B ratio represent in financial analysis?
Price to Book
How is EV calculated in the EV/Revenue multiple formula?
Equity Value + All Debt + Preferred Shares – Cash and Equivalents
What role does the EV/EBITDA ratio play in valuation?
Compares the relative value of different businesses based on EBITDA.
What does the Price Earnings Ratio (P/E Ratio) measure?
The relationship between a company's stock price and earnings per share
Which type of companies are often considered growth stocks based on their Price Earnings Ratio (P/E Ratio)?
Companies with high P/E Ratios
What is the Price Earnings Ratio (P/E Ratio) formula?
$Stock Price Per Share / Earnings Per Share$
What do low Price Earnings Ratios typically indicate about a company's stock?
They are undervalued
Which financial metric does the EV/EBITDA ratio focus on?
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
What conclusion can be drawn from a company having the highest EV/EBITDA multiple according to the text?
It has the highest growth rate
Test your knowledge on Valuation Techniques with a focus on Comparable Company Analysis and Earnings per Share. Learn about SG&A expenses and how EPS is calculated to assess common shareholder value.
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