multiples valutation: we have to evaluate an enterprise going to make an IPO, does it make sense to find financial leverage for each comparable even if after their IPO they don't have debt any more? thanks!

Question

anonymous · Answer

Value the business, i.e. find enterprise value. Then just subtract off the debt to find the value of the equity that you'd sell in an IPO.

anonymous · Answer

So use EV / EBITDA or EV / EBIT multiples to ignore capital structure in your multiples analysis.