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LOS 31.b: Calculate and interpret a justified price multiple. READING 31: MARKET-BASED VALUATION: PRICE AND
LOS 31.c: Describe rationales for and possible drawbacks ENTERPRISE VALUE MULTIPLES
to using alternative price multiples and dividend yield in
valuation. MODULE 31.3: P/S AND P/CF MULTIPLE
LOS 31.d: Calculate and interpret alternative price multiples
and dividend yield.
EXAMPLE: Calculating P/S ratio: Based on
the information in the following figure, calculate
the current P/S for Crisco Systems, Inc. and
Soothsayer Corp.
