random_walker47

"Why would you use forward EV? When you caclulate P/E do you take your projected price target?"

I personally wouldn't use it as projected... but this issue was raised as a bank-wide software calculates EV using projected net debt of say 2012... of course we use current price for P/E ratio and only use projections for earnings assuming its a leading multiple. The logic of the "softeware creators" is that in some industries (especially here in Russia) current debt levels are so small, that in a couple of years debt burden will most likely increase like 5-fold for some of the companies.... I work in equity research and haven't seen a "projected" EV calculation, but some guys from M&A say that they use projected debt for EV calculation as they are interested in acquiring a company in some future time when, as they say particularly in Russian reality, this DEBT is likely to increase...