Relative Valuation Methods with Price Multiples:
Price-to-Sales Ratio
Price-to-Cash Flow Ratio
Price-to-Book Ratio
What are the benefits and disadvantages...
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Finance
Relative Valuation Methods with Price Multiples:
Price-to-Sales Ratio
Price-to-Cash Flow Ratio
Price-to-Book Ratio
What are the benefits and disadvantages of these methods?
Would you ever use any of them as stand alone valuation methodsof a target company?
Answer & Explanation
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4.2 Ratings (932 Votes)
Price to sales Advantages 1 One can calculate for distressed firm because sales cant be negative 2 Sales revenue not easily manipulated 3 useful for mature cyclical and startup firm since it sales value is always there
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