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Valuation with Multiples: A Conceptual Analysis

Author

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  • Schueler Andreas

    (Department of Economics and Management, Bundeswehr University Munich, Werner-Heisenberg-Weg 39, 85579Neubiberg, Germany)

Abstract

Estimating the market price of a company with multiples is common practice. Especially if several multiples are used simultaneously, the bandwidth of value estimates might be wide. The paper aims at narrowing down this bandwidth with a conceptual analysis. I analyze the different ways to average peer multiples, the links between common multiples (‘inter-multiple’ analysis), the relevance of their components (‘intra-multiple’ analysis) and the resulting choice between a bottom-up and a top-down approach for deriving a multiple, and the impact of differing capital structures.

Suggested Citation

  • Schueler Andreas, 2020. "Valuation with Multiples: A Conceptual Analysis," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 15(1), pages 1-13, February.
    • Handle: RePEc:bpj:jbvela:v:15:y:2020:i:1:p:13:n:2
    DOI: 10.1515/jbvela-2019-0020
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    Cited by:

    1. Vusani Moyo & Ayodeji Michael Obadire, 2024. "A Case Study of Bank Equity Valuation Methods Employed by South African, Nigerian and Kenyan Equity Researchers," Risks, MDPI, vol. 12(6), pages 1-23, May.

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