PPR – Multiples Analysis

1 minutes read
Last updated: November 6, 2023

The last step in the purchase price ratio analysis is to calculate the valuation multiples at the various transaction prices. Doing so allows us to refine our conclusions drawn in the previous step about what constitutes a reasonable offer price by comparing the multiples thus computed with multiples paid in comparable transactions.

For a given transaction price, you should generally observe that like multiples decrease from one year to the next as the denominator (e.g. revenue, EBITDA, etc.) increases year-over-year in healthy companies. For TargetCo, we see that this is not the case.


Download Template

PPR – Multiples Analysis

Try Macabacus for free to accelerate financial modeling in Excel.

Speed Up Financial Modeling with Macabacus

Try the leading Microsoft 365 add-in for finance and banking. Create complex financial models and branded presentations in record time.

Start a Free Trial

Discover more topics

Build an operating model
In this tutorial, we will walk through how to build a general industry business operating model.
Read more
Build an M&A model
In this section, we demonstrate how to model a merger of two public companies in Excel.
Read more
Build an LBO model
In this tutorial, we will walk you through building an LBO model in Excel.
Read more
Asset and Stock Deals
The first step in purchase price allocation, or PPA, is to determine the purchase price.
Read more