Illinois Tool Works - Comparative Multiple Analysis

Illinois Tool Works (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Illinois Tool Works

WikiWealth compares Illinois Tool Works'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 Illinois Tool Works's comparative analysis.

Notes from the analysis:

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


How does this work? The Comparative Investment Analysis determines the value of Illinois Tool Works by comparing Illinois Tool Works 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 Illinois Tool Works.

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

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