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Methodological approach to business valuation by market multiples
[Metodický postup při ocenění podniku tržními násobiteli]

Author

Listed:
  • Štěpán Kohoutek
  • Pavla Maříková

Abstract

Valuation by market multiples can be considered one of the most popular and widely used valuation methods of a company. This paper deals with the proposal of a methodological approach to the valuation of a company by market multiples. The main source of information for this paper was a literature search of best practice applications and research studies. The main focus was on the different parts of the valuation procedure from the selection of a peer group to the control premium. Thus, the output of this article is a summary of the most important factors that a valuator should consider when valuing a company using market multiples.

Suggested Citation

  • Štěpán Kohoutek & Pavla Maříková, 2022. "Methodological approach to business valuation by market multiples [Metodický postup při ocenění podniku tržními násobiteli]," Oceňování, Prague University of Economics and Business, vol. 15(1), pages 3-16.
    • Handle: RePEc:prg:jnloce:v:15:y:2022:i:1:id:2022_1_01:p:3-16
    DOI: 10.18267/j.ocenovani.271
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    References listed on IDEAS

    as
    1. Alford, Aw, 1992. "The Effect Of The Set Of Comparable Firms On The Accuracy Of The Price Earnings Valuation Method," Journal of Accounting Research, Wiley Blackwell, vol. 30(1), pages 94-108.
    2. Volker Herrmann & Frank Richter, 2003. "Pricing With Performance-Controlled Multiples," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 55(3), pages 194-219, July.
    3. Robert W. Holthausen & Mark E. Zmijewski, 2012. "Valuation with Market Multiples: How to Avoid Pitfalls When Identifying and Using Comparable Companies," Journal of Applied Corporate Finance, Morgan Stanley, vol. 24(3), pages 26-38, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Market multiples; Valuation; Methodology; Tržní násobitele; Oceňování; Metodika;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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