What Are Some Implicit Assumptions That Are Made When Valuing

question 59

Essay

What are some implicit assumptions that are made when valuing a firm using multiples based on comparable firms?

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Definitions:

Uncontrollable Variation

Variation in a process or system's output that cannot be directly controlled or corrected by adjustments to the process or system itself.

Descriptive Statistics

Statistical techniques that describe or summarize a set of data, including measures of central tendency and measures of variability.

COUNTIF(range,criteria)

A function in spreadsheet software that counts the number of cells within a range that meet a specified condition.

Specified Criteria

Pre-determined standards or conditions that must be met or complied with.