(If Bombay Pizza company is trading at 8x revenue and recently Delhi Pizza Company was sold for 12x revenue. If you were to use Comparable trading multiples as a method to value your pizza company whose revenue is Rs. 80 crores (800 million), what will be the value of your pizza company?)HI Binny, in the above question how did you get the answer as 6.4 billion in comparable trading analysis is it like the valuation should be less than the other companies that we are comparing with?i understood comparing acquisition analysis where we compare with the highest revenue multiple but can you explain me how we decide the revenue multiple in trading analysis.

Jul 12 2013 03:06 PM

The valuation is 800 million x 8 = 6.4 billion.

Revenue is 800 million so since 8x is the comparable trading multiple, you multiply with that number to get the final valuation.

Jul 15 2013 12:40 PM
Revenue is 800 million so since 8x is the comparable trading multiple, you multiply with that number to get the final valuation.

The valuation is 800 million x 12 = 9.6 billion.

Revenue is 800 million so since 12x is the comparable trading multiple, you multiply with that number to get the final valuation.

Feb 18 2014 03:39 PM
Revenue is 800 million so since 12x is the comparable trading multiple, you multiply with that number to get the final valuation.