Alexandra Haugg is an analyst covering the financial sector. She has been asked to carry out a peer comparison amongst leading international banks. Haugg notes that these banks report under different accounting standards and considers which multiple would be most appropriate for her peer comparison.
Which of the following multiples would be most appropriate for Haugg's peer comparison of international banks?
A P/E
B EV/EBITDA
C price to cash flow from operations (P/CFO)
A Incorrect because P/E will generally be more affected by different accounting standards than P/CFO (and is also more prone to manipulation). Using price to cash flow rather than P/E addresses the issue of differences in accounting conservatism between companies (differences in the quality of earnings). Additionally, there are many ways in which earnings can be manipulated (discretionary accounting decisions about expenses, aggressive accounting decisions, inflating revenues, etc.). Thus cross-border comparison is more appropriate with P/CFO than with P/E.
B Incorrect because EV/EBITDA is generally more affected by different accounting standards than P/CFO. Multiples based on such concepts as EBITDA, which start from accounting earnings, will generally be the most affected (by accounting standards or accounting decisions).
C Correct because Haugg's valuation comparison is done from a cross-border perspective and P/CFO is least impacted by various accounting standards. From the perspective of international differences of accounting standards: P/CFO and P/FCFE will generally be least affected by accounting differences. P/B, P/E, and multiples based on such concepts as EBITDA, which start from accounting earnings, will generally be the most affected.
总觉得答案很牵强呢，难道CFO不受会计准则的影响了？
