What Is the Market Paying for Similar Companies?

Instead of building a DCF, relative valuation asks: if similar companies trade at 15× earnings, what should this one be worth?

PE RatioEV/EBITDAMultiplesComparables

Live Result

100

ƒ: EPS * PE_multipleraw: 100.000

ƒ(x)

Use variable names from the panel above (e.g. FV, r, n) — or type numbers directly: 10000 / (1 + 0.08)^10

EPS

Earnings Per Share — profit per share

EPS = 5

PE_multiple

Price-to-Earnings ratio of comparable firms

PE_multiple = 20

EBITDA

Earnings before interest, tax, depreciation, amortisation

EBITDA = 500

EV_mult

EV/EBITDA multiple from comparable firms

EV_mult = 12

💡 You can also enter values directly in the formula: 10000 / (1 + 0.08)^10

⬇ Export Calculation

Exports a plain .txt file with your expression, formula, all variable values, result, and educational notes — ready to paste into any report, Word doc, Notion, or Google Docs.

The exported file includes the formula in standard mathematical notation — you can paste it directly into Excel, Google Sheets, or back into FinanceSheep.

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Learn: What Is the Market Paying for Similar Companies?

Approaches to Valuation · Educational Guide

The Core Idea

You don't need to build a complex model to get a rough value. If three similar restaurants just sold for 2× annual revenue, that gives you an instant benchmark for a fourth restaurant.

How It Works

Multiples = what the market pays for each unit of earnings, sales, or cash flow. You find comparable companies (the "comps"), calculate their average multiple, and apply it to your company's metric.

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Real-World Example: If comparable tech firms trade at 20× earnings, and your company earns $5 per share: Implied price = 5 × 20 = $100 per share. If comps have EV/EBITDA of 12× and your EBITDA is $500M: Enterprise Value = $6,000M.

What Is the Market Paying for Similar Companies?

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