Acorn Food is a privately-held company in the wholesale food distribution sector. You collected data on a sample of five listed companies in the same sector and similar to Acorn Food. Get five estimates of Acorn Food's equity value based on the following:

Characteristics	Acorn Food	Average of the 5 comparable companies
Sales	$4,079,000,000	6,615,000,000
EBITDA **	$390,000,000	580,000,000
Cash flow to equity holders	$102,000,000	180,000,000
Net profits	$168,000,000	280,000,000
Book value of equity	$1,288,000,000	2,100,000,000
Market capitalization	Unknown	2,646,000,000
Enterprise value	Unknown	3,584,000,000
Net debt (debt less cash)	$856,000,000	Not available
** EBITDA = earnings before interest, tax, depreciation, and amortization

Solution: five estimates of Acorn 's equity value

Multiples	Average multiples for the 5 comparable companies	Solution: estimated equity value for Acorn	Calculations
Price-to-earnings multiple		$0		VE = net profits (GDC) X multiple
Price-to-book value multiple		$0		VE = BV of equity (GDC) x multiple
Enterprise value-to-EBITDA multiple	6.18			Enterprise value multiple = enterprise value/ EBITDA
Enterprise value (GDC) = EBITDA (GDC) x Enterprise value-to-EBITDA multiple				VE = enterprise value (GDC) - net debt (debt less cash)
Price-to-cash flow multiple		$0		VE = Cash Flow (GDC) x multiple
Price-to-sales multiple		$0		VE = Sales (GDC) x multiple