标题: Enterprise value multiples [打印本页] 作者: zbird2134 时间: 2011-7-11 19:19 标题: Enterprise value multiples
hey guys, i have two questions regarding this issue from CFAI books.
1. Page 537, it says one possible drawback to use EV/EBITDA is that EBITDA will overestimate cash flow from operations if working capital is growing.
what does that mean? why this multiple is related to CFO?
2.Page 541-542,example 35, solution to 3, WDC appears undervalued to other two companies, but it has higher ROIC and higher revenue growth, which i think is contrary to the undervaluation. why the book says these two factors support undervaluation??
Any thoughts will be apprecaited!!作者: kkn006 时间: 2011-7-11 19:19
good explanation samurai. For #1, EBITDA just doesn't show working cap investment therefore cash flow is overstated.作者: 19831985 时间: 2011-7-11 19:19
