Which of the following statements is FALSE? Video: 2.3.F. P34-37 (Comp 1) Video: 2.3.G. P38-43 (Comp 2) Valuation multiples have the advantage that they allow us to incorporate specific information about the firm's cost of capital or future growth. We can compute a firm's P/E ratio by using either trailing earnings or forward earnings with the resulting ratio called the trailing P/E or forward P/E. It is common practice to use valuation multiples based on the firm's enterprise value. Using a valuation multiple based on comparables is best viewed as a "shortcut" to the discounted cash flow method of valuation.