Credit Acceptance - Comparative Multiple Analysis

Credit Acceptance (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Credit Acceptance

WikiWealth compares Credit Acceptance's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Credit Acceptance's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Credit Acceptance.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Credit Acceptance's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Credit Acceptance's Analysis


How does this work? The Comparative Investment Analysis determines the value of Credit Acceptance by comparing Credit Acceptance financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Credit Acceptance.

See the Credit Acceptance cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Credit Acceptance.

Also, see the Credit Acceptance's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Credit Acceptance's valuation conclusion for a quick summary.