Cliffs Natural Resources - Comparative Multiple Analysis

Cliffs Natural Resources (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Cliffs Natural Resources

WikiWealth compares Cliffs Natural Resources'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 Cliffs Natural Resources's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Cliffs Natural Resources.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Cliffs Natural Resources'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 Cliffs Natural Resources's Analysis

How does this work? The Comparative Investment Analysis determines the value of Cliffs Natural Resources by comparing Cliffs Natural Resources 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 Cliffs Natural Resources.

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

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