The forward exit multiple is 8.9x therefore, this investment scenario projects multiple contraction. The forward entry multiple is 9.6x (EV / NTM unlevered FCF). We need the 2026 cash flows in order to derive the forward multiple at exit, so that we can compare the entry and exit multiples on an apples-to-apples basis ( + 5 points for banker jargon). That’s why we added an extra year of cash flows in our solution (above). Since you don’t know the company’s 2020 financials, you can only calculate a forward entry multiple.
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