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Relationship Between the Company Size and the Value: Empirical Evidence

In: The Impact of Globalization on International Finance and Accounting

Author

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  • Přemysl Krch

    (University of Economics in Prague)

Abstract

The paper provides a research summary on the relation between the levels of valuation multiples and eight criteria of company size. The criteria comprised market capitalization, enterprise value, operating revenues, EBITDA, EBIT, net profit, sum of total assets, and number of employees. Using the linear regressions and correlations, the mutual relationships between the four valuation multiples and the abovementioned criteria were tested. The key conclusions of the research are that there can be observed certain dependence of price to earning valuation multiple on most of the tested size criteria. Low dependence was identified for enterprise value to EBITDA multiple. The results for price to book value and enterprise value to sales multiples proved statistically significant level of neither correlation nor dependence.

Suggested Citation

  • Přemysl Krch, 2018. "Relationship Between the Company Size and the Value: Empirical Evidence," Springer Proceedings in Business and Economics, in: David Procházka (ed.), The Impact of Globalization on International Finance and Accounting, pages 145-152, Springer.
  • Handle: RePEc:spr:prbchp:978-3-319-68762-9_16
    DOI: 10.1007/978-3-319-68762-9_16
    as

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