Valuation Multiples Comparator mechanism

Model scope

The core P/E and P/B formulas are standard under the per-share price assumption, and EV/EBITDA is standard once EV is supplied with matching units. The specification fails because P/S is omitted, EV is not declared as an input, and peer comparison has no formula or methodology. The educational-only and not-a-buy/sell-signal label is appropriate but does not resolve these mathematical and input-definition gaps.

• P/S is claimed as an output but no P/S formula is provided; the standard formula is price_per_share/sales_per_share, equivalently market_cap/total_sales.
• EV/EBITDA=EV/EBITDA is mathematically correct but the required EV input is missing from the declared inputs.
• Peer comparison and peer delta bars have no defined calculation, including no specified peer aggregation method, baseline, or sign convention.
• The meaning of price is ambiguous: the listed P/E, P/S, and P/B formulas require price per share, not total market capitalization or enterprise value.

Units and conventions

• price, EPS, sales/share, and book value are all denominated in the same currency per share and over the same reporting period where applicable.
• EV and EBITDA are both total-company values in the same currency and reporting period.
• P/S is assumed to mean price per share divided by sales per share; alternatively, market capitalization divided by total sales produces the same ratio only when the share-count basis is consistent.
• Ratios are dimensionless.
• The numeric outputs below use the standard P/S formula even though that formula is missing from the specification.

Inspectable vector

One of 4 source-bound review vectors:

{
  "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."
}

Failure boundary

• 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.

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