Family Dollar - Comparative Multiple Analysis

Family Dollar (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Family Dollar

WikiWealth compares Family Dollar'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 Family Dollar's comparative analysis.

Notes from the analysis:

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

How does this work? The Comparative Investment Analysis determines the value of Family Dollar by comparing Family Dollar 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 Family Dollar.

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

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