The multiplicator method (multiple, Comparable company analysis) during the assessment of company value is frequent a relatively simple, from Investmentbanken and Equity analyst of in laws method for the estimation of the enterprise value.

In the basic principle is assumed certain are relevant yield and operational yardsticks for the price formation of own capital funds noted at a stock exchange. The most well-known multiplicators are P/E (Price Earnings reason, profit on exchange relationship), EV/EBITDA (Enterprise VALUE/Earnings before interest, taxes, depreciation and amortization), EV/EBIT (Enterprise VALUE/Earnings before and of taxes interest). However no borders are set to the production of new multiplicators, however must to it be paid attention that the measure in the industry of the evaluated enterprise of importance is (e.g. sales area with listed retailers), used in the denominator.

In order to evaluate an enterprise with this method, it is inevitable to find listed and operational similar enterprises (comparables, comps, more peer group) in the same industrial sector and to compute the desired multiple. If one computed the multiplicator (e.g. EV/EBITDA) for each comparable enterprise, then for this multiplicator an average (or the median) is formed, after all outliers were eliminated. This average is multiplziert with the operational yardstick of the enterprise which can be evaluated (here thus EBITDA of the enterprise). The result should be the implied enterprise value. Naturally it is meaningful to use for each evaluation a certain number of Muliplikatoren.

Together with operational characteristic numbers can be fallen back for the multiplicator method also to book values (Market ton of Book ratio - market value of own capital funds/book value of own capital funds).

Although this method of the assessment of company value is to be managed without large mathematical expenditure, a critical view of the result should be always thrown. During this evaluation that is decisive quality of the data record of the comparable enterprises.

Articles in category "Multiplicator method"

We found here 5 articles.

Related Websites

We found here 4 related websites.

• Consulta de Materias
  Lagrange multiplicator method. Optimization. Methods: gradients; steepest ascent; Newton-Raphson; Davidon-Fletcher-Powell; direct search. ...


• Estimation of IT-Projects
  The Multiplicator Method. The average productivity of programmers in LoC is multiplied by the estimated LoC, eg. the Wolverton method. ...


• PlusMult (Scalable Simulation Framework)
  PlusMult. protected PlusMult(double multiplicator). Insert the method's description here. Creation date: (8/10/99 19:12:09) ...


• Sapard, phare, fundusze strukturalne, erdf, haccp, iso i biznes ...
  Appraising companies by means of multiplicator methods consists in assessing enterprise value based on capital market indicators (multiplicators) calculated ...