Why Is EBITDA Multiple Used for Valuation Rather Than Sales

question 19

Essay

Why is EBITDA multiple used for valuation rather than sales or earnings?

Identify and explain the different forms and implications of employee compensation besides salaries and wages.

Recognize the procedures and significance of recording obligations related to taxes and government regulations.

Understand the accounting and financial implications of loan interest and repayment structures.

Understand the definitions and basic concepts related to plant assets, including obsolescence and salvage value.

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Definitions:

Corporate Accountability

Refers to a corporation's responsibility towards stakeholders and the public to conduct business ethically, sustainably, and lawfully.

Strict Disclosure Requirements

Regulations mandating that certain information must be fully and accurately disclosed to relevant parties, often in financial contexts.

Federal Or State Securities Laws

Regulations established by federal or state governments to govern the sale, purchase, and issuance of securities, aiming to protect investors and maintain market integrity.

Issuers Of Securities

Organizations or entities that create and offer financial instruments like stocks or bonds to investors.