How To Improve Your Investing Process With Clean Multiples

Multiples are a key part of fundamental analysis and security valuation. However, while the use of multiples can make fundamental analysis easier, they can be easily manipulated. Most the time this manipulation isn’t on purpose. The mere fact that analysts try and reflect such a huge volume of financial data in just one figure such as the P/E multiple or EV/EBITDA ratio is bound to lead to data discrepancies.

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The topic of misleading multiples is something UBS’s fundamental equity analysts Geoff Robinson and Guy Weynes discuss in their research booklet “How to…analyze and talk the language of multiples”. Over...