Examples price to sales ratios per p bv p cf
14
Small Cap. Large Cap. Price-to-Sales ratio 7x 6x 3x 2x Median: 4x Companies in same INDUSTRY, with same quality. Their only difference is Size of Market Capitalization:
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Transcript of Examples price to sales ratios per p bv p cf
Small Cap.
Large Cap.
Price-to-Sales ratio 7x
6x
3x
2x
Median: 4x
Companies in same INDUSTRY, with same quality. Their only difference is Size of Market Capitalization:
High-quality
earnings
Price-to-Sales ratio 7x
6x
3x
2x
Median: 4x
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
LOW-quality
earnings
LOW-quality
earnings
Price-to-Sales ratio 7x
6x
3x
2x
Median: 4x
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
HIGH-quality
earnings
Small Cap.
Large Cap.
Price-to-Earnings ratio 17x
12x
7x
5x
Median: 10x
Companies in same INDUSTRY, with same quality. Their only difference is Size of Market Capitalization:
High-quality
earnings
17x
12x
7x
5x
Median: 10x
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
LOW-quality
earnings
Price-to-Earnings ratio
LOW-quality
earnings
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
HIGH-quality
earnings
Price-to-Earnings ratio 17x
12x
7x
5x
Median: 10x
Small Cap.
Large Cap.
Price-to-Cash Flow 15x
11x
5x
2x
Median: 8x
Companies in same INDUSTRY, with same quality. Their only difference is Size of Market Capitalization:
High-quality
earnings
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
LOW-quality
earnings
Price-to-Cash Flow 15x
11x
5x
2x
Median: 8x
LOW-quality
earnings
Companies in same INDUSTRY, with same SIZE. Their only difference is QUALITY OF EARNINGS:
HIGH-quality
earnings
Price-to-Cash Flow 15x
11x
5x
2x
Median: 8x
LOW-quality earnings
HIGH-quality
earnings
Business Cycle
Trough
Peak
Trough
This area: Relatively CHEAP
Price-to-Earnings ratio
Median: 13x
+ 1 St.dev: 15x
+ 2 St.dev: 17x
RELATIVELY EXPENSIVE
17x
KEY
Below-Average PER
Price-to-Sales ratioPrice-to-Earnings ratio
Price-to-Cash Flow ratioPrice-to-Book Value
EV / EBITDA
Expen-sive
Industry Average
“Same- Quality Earnings &
F.Conditions”
Approach
#1Bargain
Stock B
Stock A
Price-to-Sales ratioPrice-to-Earnings ratio
Price-to-Cash Flow ratioPrice-to-Book Value
EV / EBITDA
Expen-sive
Historical Average
“Same- Quality Earnings &
F.Conditions”
Approach
#2Bargain
This week
Last Year
of one and the same stock
SalesAssets
Guide to Estimate
Capital to Raise?
200m / 1bn
20%
2bn /
__bn?
__bn /
50bn?
