The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Multiples Used to Estimate Corporate Value
Abstract
We evaluated various multiples practitioners use to estimate company value. We found, first, that the asset multiple (market value to book value of assets) generally generates more precise and less biased estimates than do the sales and the earnings multiples. Second, although adjusting for companies' cash levels does not improve estimates of company value, using forecasted earnings rather than trailing earnings does. Third, the earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple generally yields better estimates than does the EBIT multiple. Finally, the accuracy and bias of value estimates, as well as the relative performance of the multiples, vary greatly by company size, company profitability, and the extent of intangible value in the company.
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Cites
The Valuation of Cash Flow Forecasts: An Empirical Analysis
KAPLAN, S. N., & RUBACK, R. S. (1995) · The Journal of Finance · doi:10.1111/j.1540-6261.1995.tb04050.x · Cited by 512
Cited by
Valuation Approaches and Metrics: A Survey of the Theory and Evidence
Damodaran, A. (2007) · Foundations and Trends® in Finance · doi:10.1561/0500000013 · Cited by 326
Metadata
- Authors
- Lie, E., & Lie, H. J.
- Venue
- Financial Analysts Journal
- Publisher
- Informa UK Limited
- Published
- 2002-03
- Volume
- 58
- Issue
- 2
- Pages
- 44-54
- ISSN
- 0015-198X (ISSN-L)
- 1938-3312
- OpenAlex
- W2021380146
- Cited by
- 244
- References
- 1
- FWCI
- 17.61
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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