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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

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    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. 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.
    3. 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.
    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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