Question

Would you use a P/E ratio for a non-stock private company?

Answer 1

Depends on what you are trying to do. P/E by definition is a "price" divided by "earnings". What are you thinking of applying the P/E ratio to?

Answer 2

Sure. Just apply it to net income.

Answer 3

I appreciate the help and response. I'm trying to do a loss in value of a company who's rev peaked in 2002 and started to decline.

1. The P/S multiple for different Internet companies can be used against the revenue? The company is a e-commerce store front. So comparing the company to Yahoo or Amazon is accurate? Remember, this is small business privately owned with no stock.

2. Should I take the peak revenue or the current/full fiscal year?

I'm trying to comprehend the Finance perspective. Again, I truely appreciate the help.