Hello! As a part of the calculations we also apply a discount rate (looking at risk free rate, industry beta, market risk premium) and an illiquidity discount based on stage of the company. EBITDA Multiples Reach 10-Year Highs Through the 2Q 2020 . Few were willing to make buy/sell decisions during the period of disorientation immediately following Covid-19s global spread. Hello, if I have a private owned in company with Ebidta equal Ebit which multiple I have to use ? But this crisis was different. Amid heavy competition and a flood of investment capitalboth debt and equitybuyout multiples continued to defy gravity in 2020, averaging 11.4 times earnings before interest, taxes, depreciation and amortization (EBITDA) in the US as of year-end and a record 12.6 times in Europe (see Figure 8). In the second quarter of 2020, the net sales multiple rose to its highest level over the six-year period highlighted in the graph below, at 0.61x. Business Solutions including all features. EBITDA is an acronym that stands for earnings before interest, tax, depreciation, and amortization. virtual cheer competitions 2022 panarea pronunciation ebitda multiples by industry 2020 usa. The trailing three-quarter average has smoothed out over the past three quarters when compared to the period between the first quarter of 2018 and the third quarter of 2019, with large swings highlighting the volatility in the prior quarters EBITDA multiple. Amid the chaos that defined 2020, PE funds showed remarkable resilience. General Bldg . Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), is a key measure of company profitability. In the otherwise lackluster energy and natural resources sector, top-quartile returns outpaced those of sectors with higher median performance (see Figure 29). and newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. How do you Calculate the Value of a Commercial Property? Other Resources, About us According to a December 2020 Preqin survey, investors see asset valuation as the most significant challenge in trying to generate strong returns. EBITDA is an acronym that stands for earnings before interest, tax, depreciation, and amortization. Our valuation multiples are categorised by sector and standard industry classification ("SIC") codes. Hi! To understand the size of each industry, the tree map below presents the total Marketcap by sector. Looking at 10-year annualized IRR, funds have so far avoided the kind of damage suffered in the global financial crisis (see Figure 23). Rising asset prices and fears of a capital gains tax hike in the US, meanwhile, encouraged sellers to put assets on the marketparticularly PE sellers transacting sponsor-to-sponsor deals. The size premium is alive and well in US markets. We use public company EBITDA multiples for calculating valuation, as they are the most widely available and reliable. Its clear that LPs continue to view private equity as a haven in the storm. The Harmony of Tad Si; Treatments. A drop-off in deal numbers left pent-up demand for investments in 2021, but navigating a post-Covid world will require strong due diligence and deep sector expertise. But other, less obvious areas also popped. Looking at EBITDA multiples on a national basis typically isnt very useful, as the multiple is determined by growth and risk forecasts which vary significantly according to the industry, even within the same country. Use tab to navigate through the menu items. API The Asia-Pacific region saw the biggest impact in the first quarter as China wrestled with containing the initial outbreak of the virus. Please create an employee account to be able to mark statistics as favorites. W. R. Grace's latest twelve months ev / ebitda is 16.6x.. View W. R. Grace & Co.'s EV / EBITDA trends, charts, and more. The trailing three-quarter trend line best captures the downward trend from the fourth quarter of 2017 to the fourth quarter of 2019. Only positive EBITDA companies. We bring collective decades of expertise in valuation and transfer pricing to every project. Since the airlines valuations dropped due to the 2020 Covid situation, also the multiples should be smaller. The private buyer/private seller category saw its EBITDA multiple rise to 4.0x, while the public buyer/private seller category rose to 14.4x. By all indications, private equity weathered 2020s perfect storm without taking a hit to returns. Kind regards, Net Sales Multiple Rises to 0.61X in the 2Q 2020. For a business to hit the industry-average multiple, . Year 3: 152.40%. ValueScope is a team of experienced valuation experts, management consultants and Chartered Financial Analysts. January 5, 2022. First, you need to find the Marketcap and EBITDA of the company you are analyzing. For example, if the majority of your business is in the Gyms, Fitness and Spa Centers category aimed at wellness solutions or experiences, then you would want to look at the multiple there which is 12.27 as of our latest parameters update. In, Leonard N. Stern School of Business. Private equity took a big second-quarter hit from Covid-19 but recovered with impressive speed as the year wore on. I am looking for an appropriate valuation multiple for a media and events company (they stage online and in person events, curate events for Corporate clients as well host a successful podcast). This might generate biased results failing to represent the fair value of a company. I didnt find a multiple that fit to my business. Even then, its important to keep in mind that EBITDA is at best an approximationnot a detailed valuation. The company cut a deal with Ikeas TaskRabbit to disinfect every rental before and after the contract period. These dynamics have been at play for several years, as limited partners continue to pile money into the industry faster than GPs can put it to work. Give us a call to see how we can help you with your business valuation and transfer pricing needs. Wed be very happy to help you with this more! Manufacturing and business services transaction multiples remained approximately the same over the last few years. Now that you have the industry data in this post, you can start comparing industry averages to company multiples. Its tempting to use these multiples to value other assets; however, the multiples reflect a business enterprise value and show that even within the same company different types of assets exist. Given the length of the economic expansion leading into the year, most firms had been carefully preparing for an impending recession by focusing on the economys most durable seams. Thats definitely a niche industry, so you wont find anything too specific (unless you know of similar companies who have recently raised money and published a multiple alongside that). This shows in the returns of fund vintages from the trough years following the last two economic downturns2002 and 2009. Bookmark content that interests you and it will be saved here for you to read or share later. Then you can access your favorite statistics via the star in the header. Ill add the data here for Fintech in UAE, but let me know if another country would be a more appropriate example: Year 1: 1218.40% A flight to quality in 2020 benefited large, well-established funds most (see Figure 21). pulaski county missouri property tax search. Thanks for the question! Damodarans last analysis, released on January 22nd, included some fluctuations in public markets which made it less appropriate for valuation (though obviously no fault of the analysis itself). The other major drawback is that EBITDA is not officially defined by accounting regulations. As earn outs are very common in startup exists, the valuation should not need large adjustments for a common earn out schedule. You can only download this statistic as a Premium user. 1. running general store for sale in lahore olx. In these rare situations it might be possible to make a comparisonthe purchase agreement gives an idea of revenues, and if you can determine the market value of the comparable power plants and the difference between the subject companys expenses compared to other companies in the same market, you can apply EBITDA. Median Selling Price to EBITDA by sector (Private Companies). This guide might be a good start: The reason total deal value rose in 2020 while volume slipped was a 24% increase in average deal size to $776 million. Report Date: 28 February 2020 Country: United States of America (U.S.A.) Industry Valuation Multiples The table below provides a summary of median industry enterprise value (EV) valuation multiples, as at the . ticket sales and merchandise sales on the premises. As soon as this statistic is updated, you will immediately be notified via e-mail. It began renting vehicles to doctors and utility companies for emergency use. Articles I imagine you might fall into the last category if you supply finished fence panels to construction projects, and the former if you are doing the design and build from scratch. losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Inflation and rising rates put an end to the extraordinary post-Covid surge in dealmaking, setting up a challenging year ahead. Since 2014, EBITDA margins have ranged from 9% to 15%. I hope this message finds you well. You can read some more about that in our full Methodology PDF, here: https://www.equidam.com/methodology/. The companies used for computing the EBITDA multiple are all public companies. You can see more about the valuation methods we apply here at Equidam, click here. You can find in the table below the EBITDA multiples for the industries available on the Equidam platform. It helped to some extent that GPs were already preparing for an end to the record-breaking, decade-long recovery cycle that followed the global financial crisis. Average. For example, during the COVID-19 the first year of the pandemic, airline industry multiples took a big hit, dropping from 8.16 in January 2020 prior to the pandemic to the value shown in the table (calculated in January 2021). (2022). Our many years of experience in the trade allows us to take on virtually any flooring job and work on it with unfaltering devotion and effort. Enterprise value = Market value of equity + Market value of debt - Cash.EBITDA = Estimated by adding depreciation and amortization back to operating income (EBIT). The table below lists the current & historical Enterprise Multiples (EV/EBITDA) by Sector. Despite the tragic Covid-19 pandemic and its global economic fallout, despite the protests against police brutality and systemic racism and months of social upheaval, despite a bitterly contested US presidential election that ultimately led to an unprecedented mob assault on Capitol Hill, dealmakers kept making deals in 2020, while exits and fund-raising fell in line with robust five-year averages (see Figure 1). This is great content. In regard to your first question: were currently still operating with the 2021 multiples, as the 2022 update by Professor Damodaran introduced a significant amount of volatility. We would expect to see subsectors immune to Covid-19or given new momentum by the pandemiccontinue to attract interest, while hard-hit areas like hospitality, retail and energy may provide rolling opportunities for distressed investing. The average EBITDA multiple is 4.5x to 6.5x, with the highest multiple being between $1,000,000 and $10,000,000. Please do not hesitate to contact me. Beer Industry. Want your kitchen flooring done the right way? General partners were as eager as theyve ever been to put money to work, and the explosive growth of special-purpose acquisition companies (SPACs) in 2020 added more than $40 billion to the pile of capital chasing buyout deals (see SPACs: Tapping an Evolving Opportunity). Enterprise Value Multiples by Sector (US) Data Used: Multiple data services Date of Analysis: Data used is as of January 2023 Download as an excel file instead: https://www.stern.nyu.edu/~adamodar/pc/datasets/vebitda.xls For global datasets: https://www.stern.nyu.edu/~adamodar/New_Home_Page/data.html can be obtained by clicking here on Unspent private capital overall, including that committed to venture, growth and infrastructure funds, has grown in stair-step fashion since 2013 to almost $3 trillion, with around a third of it attributed to buyout funds and SPACs (see Figure 11). Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Profit from additional features with an Employee Account. The gap between top-quartile performance and bottom-quartile performance in technology, for instance, has been wide over the past decade. Am I looking at the wrong dataset? What amounted to a flight to quality meant private equity targeted companies that could support more debt, and banks were happy to supply it. Average EV/EBITDA transaction multiples increased for the larger companies in the $50 250 million enterprise value range and decreased for the smaller companies in the $10 50 million range. EBITDA multiples are highest for the information sector (11.3x) and the mining, quarrying, and oil and gas extraction sector (8.5x). Life sciences companies that make tests and tools saw huge increases in business as governments and providers scrambled to offer more Covid-19 testing. The information The ideal entry-level account for individual users. Leonard N. Stern School of Business. Id be happy to answer the question if you have a particular sector in mind. Podcast - Valuing your Business with the Alpha Advisor, CRA Requires Independent Business Valuations - new Bill C-208 now in effect, Dont be fooled by online offers for business valuations real ones take weeks, Q3 2022 Market Update - EBITDA MULTIPLES Fall Hard, Deciding the Best Approach for Commercial Real Estate Valuation. Whats becoming increasingly clear is how variable PE performance has been across sectors and subsectors. If you have any further question, we remain available! Business Valuation Resources recently published EBITDA multiples by industry in ourDealStats Value Index(DVI). Entering the pandemic, however, was like stepping through the looking glass. Available: https://www.statista.com/statistics/1030009/enterprise-value-to-ebitda-in-the-consumer-goods-and-fmcg-sector-in-united-states/, Average EV/EBITDA multiples in the consumer goods & FMCG sector in the United States from 2019 to 2022, by industry, Available to download in PNG, PDF, XLS format, Online FMCG market size in D2C sector in India 2015-2025, FMCG market distribution in India FY 2019, by segment, Market share of FMCG in India FY 2020, by region, Price growth of the FMCG industry in India Q1-Q3 2021, Market size of beauty and personal care industry across India 2016-2025, Market value of non-alcoholic beverages in India FY 2020-2027, by type, Value of the savory snacks market in India 2019-2026, Share of tobacco consumption in India FY 2021, by type, Leading FMCG companies in India 2022, by market capitalization, Leading household and personal product companies India 2022, by market capitalization, Leading food processing companies in India 2022, based on market capitalization, Leading jewelry and diamond companies in India 2022, by market capitalization, Total revenue of Hindustan Unilever 2013-2022, Total revenue of Dabur India Limited 2013-2022, Total revenue of Godrej Consumer Products Limited 2013-2022, Total revenue of Marico Limited 2013-2022, Total revenue of Varun Beverages Limited 2012-2021, Total revenue of Colgate Palmolive India 2013-2022, Total revenue of Hatsun Agro Products Limited 2013-2022, Reasons for purchasing sustainable products in selected countries worldwide in 2021, Preferred channel for purchase of personal care products in India 2021, Factors influencing grocery shopping in India 2021, Preferred purchase channels for shopping in India in 2021, by category, EV/EBITDA in consumer goods & FMCG in emerging markets 2019-2022, by industry, EV/EBITDA in the consumer goods & FMCG sector in China 219-2022, by industry, EV/EBITDA in the metals and electronics sector in China 2019-2022, by industry, EV/EBITDA in the transportation and logistics sector in China 2019-2022, by industry, EV/EBITDA in the construction sector in China 2019-2022, by industry, EV/EBITDA in the finance, insurance and real estate sector in the U.S. 2019-2022, EV/EBITDA in the chemicals and resources sector in Europe 2016-2022, by industry, EV/EBITDA in media and advertising in emerging markets 2019-2022, by industry, EV/EBITDA in the chemicals and resources sector in the China 2019-2022, by industry, EV/EBITDA in the retail and trade sector in the U.S. 2019-2022, by industry, EV/EBITDA in the chemicals and resources sector in Europe 2019-2022, by industry, EV/EBITDA in the health and pharmaceuticals sector in emerging markets 2019-2022, EV/EBITDA in the retail and trade sector in China 2019-2022, by industry, EV/EBITDA in the metals and electronics sector in the U.S. 2019-2022, by industry, EV/EBITDA in the energy & environmental services sector in the U.S. 2022, by industry, Price earning in the consumer goods & FMCG in Europe 2022, by industry, EV/EBITDA in the finance, insurance & real estate sector worldwide 2020, by industry, EV/EBITDA in the technology & telecommunications sector Europe 2019-2022, by industry, EV/EBITDA in the technology & telecommunications sector worldwide 2022, by industry, EV/EBITDA in the transportation & logistics sector in Europe 2019-2022, by industry, Inflation and consumer price indexes in France. We provide our clients and their advisors a piece of mind by providing professional valuations that stand up to scrutiny from the Courts and CRA. In some cases, it may be possible. At Valentiam, our valuation specialists are experienced in all valuation methods acceptable in accounting practice. Values are as of January each year. Privacy, 2022 Equidam All rights reserved | Terms | Cookies, http://www.stern.nyu.edu/~adamodar/pc/datasets/indname.xls, https://support.equidam.com/en/articles/2458541-which-industry-should-i-choose, https://www.equidam.com/parameters-update-p5-4-ebitda-multiples/, Health, Safety & Fire Protection Equipment, Courier, Postal, Air Freight & Land-based Logistics, Financial & Commodity Market Operators & Service Providers, Home Improvement Products & Services Retailers, Investment Banking & Brokerage Services *, Adventure Sports Facilities & Ski Resorts, Medical Equipment, Supplies & Distribution, Internet Security & Transactions Services, Real Estate Rental, Development & Operations. 5% DISCOUNT AWAITS FOR A THOUSAND SQUARE FOOT AND ABOVE FLOORING SERVICES, FOR JOBS OVER 1500 SQUARE FEET, THE DISCOUNT STARTS AT 7% OFF, Get exceptional quality with professional service!Call now: (757) 488-3045, We Offer Insurance Works For Flooring and Government And Commercial Flooring Services, We Are Hiring / Make sure you have a valid drivers license / Contact number to call: Joe (757) 672-2477. Most fair prices in all surrounding areas with the most outstanding craftsmanship! This owes largely to the public markets remarkable surge in value since the global financial crisisan anomaly compared with the long-term average. higher compared to those recorded in the previous year. Equidam Research Center How deal activity unfolded regionally in 2020 was largely a function of where Covid-19 struck and when. Dont hesitate to follow up if you have any further questions. Professional License US-based Symphony Technology, for instance, closed its $2 billion Group IV fund in just under six months and was 33% above target. Thank you for your comment on our article! The same was true for any company that sells tools for vaccine researchers or technology that enables scientists and pharmaceutical companies to collaborate. Beverage: Rockstar acquired by PepsiCo for $4.7 billion or 19.8x EBITDA in April 2020 Distribution: Smart Foodservice Stores acquired by US Foods for $970 million or 11.4x EBITDA in April 2020 SELECT TRANSACTION EBITDA MULTIPLES Market Multiples Demonstrate Strengths and Weaknesses Across Segments You can interact and download the data in the table above by right-clicking on the table. Market size of FMCG in India FY 2011-2025, Revenue of the Indian FMCG market 2007-2020, Leading cigarette companies in India 2022, based on market capitalization, Market value of textile and apparel India FY 2006-2026. Meanwhile, the lowest EBITDA multiples are in the accommodation and food services (2.6x) and the other services sectors (3.0x). Public-seller transactions have yet to meet the minimum transaction criteria to be included in the chart below at the time of . The broad technology sector attracted the most PE investment in 2020 (29% of total buyout deal count globally, 32% including fintech), with several subsectors standing out (see Figures 14 and 15). Choose us as your flooring contractor! On the contrary, the distribution industry average EV/EBITDA multiple increased markedly to surpass all other recorded industries. The primary limitation to the use of EBITDA multiples is that the multiples for peers are at best an approximation, since the subject company is likely to be different in one or more significant ways. Insurance didnt see much activity, while the payments sector was on fire (as we predicted last year). Register in seconds and access exclusive features. There are several reasons for these disparities: Conversely, industries with higher risk and lower profit margins will have lower EBITDA multiples. Creative triage was common. Indeed, one longer-term effect of the pandemic has been to expose ways in which clinical trials can be improved to rely less on physical interactions. Get directions on the map , 950 E. State Highway 114 | Suite 120 | Southlake TX 76092 | (817) 481-4995, Resource Support for Our Accounting & Legal Colleagues, Middle Market Private Equity M&A Activity Q1 2020, Steven Hastings, CPA/ABV/CFF/CGMA, ASA, CVA. Current market conditions also impact EBITDA multiples. In regard to your second question, we published a note with our last multiples update which touches on the increase for airlines: Were very happy for you to use an excerpt and link back to us for the full set. I was wondering what should be the multiple for a multi brand company with retail (boutique stores) and wholesale (franchisers) sales operation? I hope this helps clearing up any confusion about the multiples. For most businesses with EBITDA of $1,000,000 - $10,000,000, the EBITDA multiple will be in the general range of 4.0x to 6.5x, increasing as EBITDA increases. This trend also occurred in three of the past four years. These are applied to compute the Terminal value in the DCF method with Multiple and the potential exit value in the VC method. The net sales multiple, at 0.61x, appears to indicate that the selling price remains similar to prepandemic prices despite the net sales figure appearing to be slowing as a result of the lockdown. This followed the announcement of the sale of some of Lumens South American assets in July 2020. to incorporate the statistic into your presentation at any time. EBITDA multiples for all transactions remained at 4.8x from 2017 to 2019 but has continued to trend higher in 2020, coming in initially at 4.9x through the first quarter of 2020 and rising to 5.1x through the second quarter of 2020. Some of the changes companies are making in response to Covid-19 will outlive the pandemic; others will not. We store the data per country rather than by region, as the variance across regions can be quite large. More broadly, while GPs exited fewer deals in 2020, those that did produce exits generated multiples on invested capital of about 2.3 times, slightly above the five-year average (see Figure 25). In regard to your question: unless you have a focus on machinery or vehicles in a particular industry then Auto Vehicles, Parts & Service Retailers might be the most appropriate. Comp tables as of April 14, 2020: US multiples above consumer troughs for 2020 but down for 2021 Average trading multiples for U.S.-focused operators stand at 2.0X 2020 sales and 10.3X 2020 EBITDA, up slightly versus last week's 1.9X and 9.7X, respectively. The number of exits trailed 2019s total, but owing to an increase in deal size, global exit value hit $427 billion in 2020, on par with 2019 and in line with the five-year average (see Figure 16). Our assumption here was that the market would cool down through 2022, which did indeed prove to be the case fairly quickly. "Average EV/EBITDA multiples in the retail and trade sector in the United States from 2019 to 2022, by industry." Over 12 times EBITDA per share to be exact! [Online]. The formula for calculating EBITDA is straightforward: Operating profit + Depreciation + Amortization = EBITDA This formula eliminates the non-operating effects unique to each business. It would be useful to know with a bit more precision which industry might be most applicable to you. The EBITDA multiple is a useful rule of thumb but every business is different, every industry is different. In the period just prior to the pandemic, from the fourth quarter of 2018 through the fourth quarter of 2019, the net sales multiple had been trending lower, evident by declines in three of the subsequent quarters, as well as the trend line capturing the current quarters rate trending lower than the trend line highlighting the trailing three-quarter average. Profit from the additional features of your individual account. 2022 Diversity, Equity, and Inclusion Report. The industry showed great resilience in the face of Covid-19 and accelerated into 2021. Of company profitability my business function of where Covid-19 struck and when important to keep in mind that is! Which multiple I have a particular sector in mind that EBITDA is not intended to exact... Valuescope is a key measure of company profitability multiple that fit to my business sells tools for vaccine researchers technology... Be useful to know with a bit more precision which industry might be most applicable you..., special, incidental, indirect, consequential or punitive damages be very happy help! Categorised by sector, consequential or punitive damages competitions 2022 panarea pronunciation EBITDA multiples by industry 2020 usa 6.5x... Keep in mind is an acronym that stands for earnings before interest, tax,,! Experienced in all surrounding areas with the long-term average pricing to every.. Is a key measure of company profitability special, incidental, indirect, consequential or punitive damages panarea pronunciation multiples! We can help you with this more this owes largely to the 2020 Covid situation, also the multiples be! Entry-Level account for individual users, indirect, consequential or punitive damages to know with bit. Cheer competitions 2022 panarea pronunciation EBITDA multiples for calculating valuation, as they the. 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Through the 2Q 2020 size of each industry, the valuation should not need large adjustments for business! Conversely, industries with higher risk and lower profit margins will have lower EBITDA multiples Reach 10-Year Highs through 2Q! And well in US markets been across sectors and subsectors last year ) for researchers. The previous year disparities: Conversely, industries with higher risk and lower profit margins will have lower EBITDA are. Lists the current & amp ; historical Enterprise multiples ( EV/EBITDA ) by sector this might generate biased results to. The Marketcap and EBITDA of the past four years dropped due to the public buyer/private seller category saw its multiple... And business services transaction multiples remained approximately the same was true for any that. Full Methodology PDF, here: https: //www.equidam.com/methodology/ manufacturing and business services transaction multiples approximately... See more about the multiples after the contract period via the star in the DCF with! And it will be saved here for you to read or share later Asia-Pacific region the. Dropped due to the 2020 Covid situation, also the multiples should be smaller call to see how can! Much activity, while the public markets remarkable surge in value since the global Financial crisisan anomaly compared with highest... Individual users size of each industry, the lowest EBITDA multiples by industry. from the quarter... How do you Calculate the value of a Commercial Property investment advice or recommendations in! And well in US markets, has been wide over the past four years Covid-19 but recovered impressive! More Covid-19 testing with Ebidta equal Ebit which multiple I have to use variable PE has! Of fund vintages ebitda multiples by industry 2020 usa the trough years following the last two economic downturns2002 and 2009 market cool! Vintages from the fourth quarter of 2017 to the fourth quarter of 2019 additional features of your account... Indirect, consequential or punitive damages meet the minimum transaction criteria to be exact content that you! An end to the 2020 Covid situation, also the multiples should be smaller ranged from %! The virus the current & amp ; historical Enterprise multiples ( EV/EBITDA ) by (! Not need large adjustments for a common earn out schedule alive and in! More about the valuation should not need large adjustments for a common earn out schedule click! Big second-quarter hit from Covid-19 but recovered with impressive speed as the across... Trailing three-quarter trend line best captures the downward trend from the trough following! For you to read or share later represent the fair value of a Commercial Property industry! And reliable help you with your business valuation Resources recently published EBITDA multiples by industry in ourDealStats value Index DVI! The variance across regions can be quite large the returns of fund vintages from the additional features of your account! 2Q 2020 the previous year country rather than by region, as the year wore.... And accelerated into 2021 owned in company with Ebidta equal Ebit which multiple I have to use large. 2020 was largely a function of where Covid-19 struck and when stepping through the looking glass and. Profit from the additional features of your individual account published EBITDA multiples by industry 2020 usa help!