Forest Oil - Comparative Multiple Analysis

Forest Oil (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Forest Oil

WikiWealth compares Forest Oil'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 Forest Oil's comparative analysis.

Notes from the analysis:

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


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

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

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