Why available multiples depend on the reporting model?

Financial statements for banks, insurance firms and other financial institutions differ significantly from those of so-called industrial firms involved in manufacturing and providing services. For such firms, there is indeed no clear difference between operating and financing activities because interest, investments and debt are related to the company’s core operations. The section traditionally found at the bottom of the income statement for industrial companies “moves up” as interests, premiums, dividends, fees or commissions become an essential part of their operating income, referred to as Total Revenue or Total Income instead of Net Sales. Likewise, the concept of EBITDA or EBIT is not relevant for non-industrial companies, except for financial institutions which are more similar to industrial firms.

For that reason, Infront Analytics automatically adjusts the display template in views showing valuation multiples according to the reporting model of the selected company.