PEINVEST
Earnings Before Interest, Taxes, Depreciation, and Amortization—a widely used proxy for operating cash flow in PE valuations. EBITDA multiples are the most common valuation metric for buyout transactions, allowing comparison across companies with different capital structures.
The total value of a company, calculated as market capitalization plus net debt minus cash. Enterprise value represents the theoretical takeover price and is the basis for EV/EBITDA multiples commonly used in PE deal pricing.
An increase in the valuation multiple (e.g., EV/EBITDA) at which a company is valued between acquisition and exit. Multiple expansion is one of three primary value creation levers in PE, alongside revenue growth and margin improvement.
A valuation method that estimates the present value of an investment based on its expected future cash flows, discounted at an appropriate rate. DCF analysis is a fundamental tool in PE for assessing the intrinsic value of potential acquisition targets.