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Methodology to assess the market value of companies according to their financial and social responsibility aspects: An AHP approach

Author

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  • Tomás Gómez-Navarro
  • Mónica García-Melón
  • Francisco Guijarro
  • Marion Preuss

Abstract

This paper proposes a combination of the Analytic Hierarchy Process with Goal Programming for a better valuation of companies. The methodology includes the economic dimension of the company and another based on its social responsibility. A set of relative and absolute economic variables is proposed including concepts like leverage, liquidity or solvency. For the CSR dimension, we present a set of variables extracted from sustainability reports based on the Global Reporting Initiative. This way, the whole methodology relies on publicly available data and can be readily reproduced. We prove the methodology with a complex case study involving the estimation of a German real estate company that wants to foresee its market value. For that, we have analysed four comparable companies plus the target one.

Suggested Citation

  • Tomás Gómez-Navarro & Mónica García-Melón & Francisco Guijarro & Marion Preuss, 2018. "Methodology to assess the market value of companies according to their financial and social responsibility aspects: An AHP approach," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 69(10), pages 1599-1608, October.
    • Handle: RePEc:taf:tjorxx:v:69:y:2018:i:10:p:1599-1608
    DOI: 10.1057/s41274-017-0222-7
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    Citations

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    Cited by:

    1. Vladan Pavlovic & Goranka Knezevic & Antonio Andre Cunha Callado, 2022. "Is the Corporate Solvency Conundrum Primarily a Balkan Issue or a Broader European Continental Misunderstanding?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 72-93.
    2. Artem Stopochkin & Inessa Sytnik & Janusz Wielki & Nataliia Zemlianska, 2021. "Methodology for Building Trader's Investment Strategy Based on Assessment of the Market Value of the Company," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 913-935.
    3. Gómez Romero, José Andrés & Soto Flores, Rocío & Garduño Román, Susana, 2020. "Selección de un modelo para evaluar la sostenibilidad hidroeléctrica mediante el método AHP || Selection of a model to evaluate hydroelectric sustainability through the AHP method," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 30(1), pages 117-141, December.

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