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Empirical analysis of selected prediction methods as a basis for estimating the long-term growth rate in the income valuation of the company
[Empirická analýza vybraných predikčních metod jako podkladu pro odhad dlouhodobého tempa růstu při výnosovém ocenění podniku]

Author

Listed:
  • Pavla Maříková
  • Michael Miláček

Abstract

The article presents the results of an empirical analysis of the past time series of production growth in the main branches of the Czech economy. The period from 1993 to 2019 is analyzed. A regression analysis of the linear dependence of industry growth on GDP growth, an analysis of long-term growth averages and an analysis of the development of the ratio of sector growth to GDP growth are performed on the data. The aim is to point out the possibilities of using the given methods as a partial basis for valuers when they estimate the long-term growth rate of the valued business. The results show that only some sectors have a connection with GDP development. Long-term and moving averages of industry growth appear to be a relatively useful tool, but they need to be supplemented with other methods and analysis of factors affecting the industry when estimating future growth.

Suggested Citation

  • Pavla Maříková & Michael Miláček, 2022. "Empirical analysis of selected prediction methods as a basis for estimating the long-term growth rate in the income valuation of the company [Empirická analýza vybraných predikčních metod jako podk," Oceňování, Prague University of Economics and Business, vol. 15(2), pages 33-54.
    • Handle: RePEc:prg:jnloce:v:15:y:2022:i:2:id:2022_2_03:p:33-54
    DOI: 10.18267/j.ocenovani.277
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    More about this item

    Keywords

    Value; business valuation; grow rate; regression analysis; prediction; Hodnota; ocenění podniku; tempo růstu; regresní analýza; predikce;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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