ModeldrillTrading multiples from a peer group
A financial modeling exercise from Modeldrill. Solve it with a live spreadsheet grid in your browser, with Fill right and Fill down, and it is checked the moment you submit.
The task
Value the target from five listed peers. Fill each peer's EV / EBITDA multiple (column D), the median multiple (B11, with MEDIAN) and the mean (B12, with AVERAGE). Then fill the target's implied enterprise value at the median multiple (B13) and its implied equity value after net debt (B14).
What this exercise teaches
One peer on 21 times EBITDA pulls the mean to 10.8 while the median stays at 8.5. Analysts lead with the median because a single outlier should not set the value. The multiple gives enterprise value; equity value comes after net debt.
A hint if you get stuck
Each multiple is enterprise value over EBITDA. Apply the median, not the mean, to the target's EBITDA, then take off net debt to get from enterprise value to equity value.
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