Equity valuation is a key part of finance and accounting, often taught in business schools. The focus is usually on complex models like discounted cash flow and residual income valuation. However, these models can be tricky to use and are sensitive to different assumptions. As a result, many professionals prefer using simpler methods like price to earnings multiples for valuing companies. These multiples are commonly used in reports by analysts and investment bankers, as well as in corporate transactions. Even experts who prefer complex models often turn to multiples for estimating terminal values or checking their results.