However, even with GE Capital weighing down overall valuation and the stock trading at an
enterprise multiple discount to its peer group, Bank of America still estimates the stock has more than 25% upside from its current level.
Before fees and other customary adjustments, the anticipated sale price represent an Enterprise Value of EURO255M ($298M at $1.17/Euro) representing an
enterprise multiple of 5.4 times Adjusted EBITDA.
The average
enterprise multiple (EV / EBITDA) for acquisitions in the period 2010-2015 was 10.6 in comparison to 8.9 in the preceding five years, so the 'buy low, sell high' mantra is becoming increasingly difficult to achieve.
The average
enterprise multiple (EV / EBITDA) for acquisitions in the period 2010-2015 was 10.6 in comparison to8.9 in the preceding five years, so the 'buy low, sell high' mantra is becoming increasingly difficult to achieve.
It represents an
enterprise multiple of 5.7 times based on annual profit in 2011 on a stand-alone basis.
Another ratio that takes care of the debt leveraging aspect across companies is the EV/EBITDA (enterprise value/ earnings before interest, tax, depreciation and amortisation), or the
enterprise multiple. But, as Agrawal says, it is always advisable to consider two or three valuation tools before taking an investment decision.