Valuation Multiples Comparator implementation

Binding contract

This record describes what an executable surface must bind and validate. It does not claim that a public calculator, package, or production route is deployed.

Record owner

Guth Instruments

Lifecycle

verified-clean

Evidence ID

t4-224

Effect

Computation or source lookup only

Input and validation requirements

• Division by zero occurs when EPS, sales/share, EBITDA, or book value per share is zero; the implementation needs explicit undefined/error handling rather than Infinity or NaN.
• Negative EPS makes P/E negative and typically unsuitable for ordinary multiple interpretation; negative or zero book value, sales, or EBITDA also requires an explicit labeling policy.
• EV must be defined consistently, typically as equity value plus debt plus preferred equity plus minority interest minus cash and equivalents; omitting components can make EV/EBITDA misleading.
• Period mismatches between price/EV and trailing or forward financial metrics can produce invalid comparisons; the period basis must be explicit.
• Peer deltas are undefined without a specified reference statistic such as peer mean, median, or selected peer, and without a sign convention.
• Currency and scale mismatches, especially cents versus currency units or thousands versus millions, can produce materially incorrect ratios.

Required corrections

No binding erratum is attached to this unique-name record. Implementers must still preserve the declared units, domain, and failure behavior.

Inspectable interface fixture

The sample below is evidence for interface and validation tests, not a production implementation.

{
  "inputs": {
    "price": 60,
    "EPS": 3,
    "sales/share": 24,
    "EV": 900,
    "EBITDA": 150,
    "book_value_per_share": 30
  },
  "expected_outputs": {
    "P/E": 20,
    "P/S": 2.5,
    "EV/EBITDA": 6,
    "P/B": 2
  },
  "working": "P/E = 60 / 3 = 20. P/S = 60 / 24 = 2.5. EV/EBITDA = 900 / 150 = 6. P/B = 60 / 30 = 2."
}

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche4/tranche4-results.json