Which of the following market multiples is most appropriate in international valuation comparisons? a) Price / adjusted CFO b) P/E c) P/S d) EV / EBITDA
a. least effected by acct’g differences/ mngt manipulation
A. Its also adjusted and I remember something about country risk easier to adjust in cash flow
i’m also going for A
p/Adjusted CFO and dividend yield are least affected, right?
The correct answer is A. While all price multiples are affected by some degree by differences in international accounting standards, the least affected are price to cash flow ratios.