TY - JOUR
T1 - Best Practices in Applying Multiples for Valuation Purposes
AU - Plenborg, Thomas
AU - Pimentel, René Coppe
PY - 2016
Y1 - 2016
N2 - A literature review suggests eight empirical implementation issues to which practitioners should give increased attention. Implementation issues include how comparable firms are selected, the use of reported versus forecasted earnings, and the most suitable way of calculating averages. We identify a more effective way to handle each implementation issue in order to enhance the accuracy of valuation outputs. By synthesizing the main empirical findings and thereby identifying best practices when applying market multiples, we expect to help analysts, portfolios managers, and investment bankers make more informed decisions when accessing a firm’s value.
AB - A literature review suggests eight empirical implementation issues to which practitioners should give increased attention. Implementation issues include how comparable firms are selected, the use of reported versus forecasted earnings, and the most suitable way of calculating averages. We identify a more effective way to handle each implementation issue in order to enhance the accuracy of valuation outputs. By synthesizing the main empirical findings and thereby identifying best practices when applying market multiples, we expect to help analysts, portfolios managers, and investment bankers make more informed decisions when accessing a firm’s value.
UR - http://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=110978984445589
U2 - 10.3905/jpe.2016.19.3.055
DO - 10.3905/jpe.2016.19.3.055
M3 - Journal article
VL - 19
SP - 55
EP - 64
JO - Journal of Private Equity
JF - Journal of Private Equity
SN - 1096-5572
IS - 3
ER -