Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / True or False - The Compound Annual Growth Rate should be adjusted for inflation
True or False
- The Compound Annual Growth Rate should be adjusted for inflation.
- Common-sizing of an Income Statement involves taking every accounting variable presented on the Income Statement as a percentage of Total Assets.
- The foundation for Market Comparables is built on the premise that similar companies provide a highly relevant reference point for valuing a given target firm due to the fact that they share key business and financial characteristics, performance drivers, and risks.
- Since no two companies are exactly the same, assigning a valuation based on the market characteristics of similar companies may fail to accurately capture a given company’s true value.
- To benchmark the comparable companies, you lay out the calculated spread to find the target firm’s relative ranking and closest comparable companies.
1. False, The Compound Annual Growth Rate is a nominal rate and there is no need to adjust for inflation
2. False, Income statement line items should be presented as a percentage of Sales/Revenues
3. True
4. True, these are not the accurate values and values could also lead to deviate if the peers are not valued properly
5. False, while arriving at comparables we dont take any spread
