Talk:Valuation using multiples

Math downwards
I would be tempted to delete all of this. The maths, flow diagram and example all deal with a "forward discounted PE ratio" which is one very specific (and not even the most common) example of a valuation using a multiples.

Keepcool28

Determining correct Price Earning Ratio (P/E)
This statement "One company, PM Software, has substantially better PER then the other ones" is flawed. It has the lowest PE ratio, that is it is the cheapest share and most would therefore say the worst PE ratio (only a buyer would regard it as the best). It is therefore inconsistent with the subsequent positive spin of government contracts seeking to argue up the value.

I agree it should be discarded, but because it is too cheap by reference to its peers, not too expensive!

CharlieO

Math
The math is at least unclear and/or approximative, at most wrong. Can someone change it into a latex formula? Can all values be defined? Lachambre 13:01, 20 November 2006 (UTC)

Equity valuation - last one in article
The last equity valuation in the article looks flawed to me:

"Calculate the current value of the future company value by multiplying the future business value with the discount factor. This is known as the time value of money.

Example:

VirusControl multiplies their future company value with the discount factor:

45.800.000 * (1-0.2) = 36,640,000 The company or equity value of VirusControl : € 36,640,000 million"

The discount factor in the immediate prior paragraph was .116, which would have resulted in a value closer to 5.3M. Perhaps these paragraphs are not related but they would make more sense if they were.

69.12.177.26 02:03, 13 February 2007 (UTC)Alan C.

Yes I agree. It doesn't seem to follow, and it should. Also the value used in the discount section of the article is 45.8 million, whereas the undiscounteed price was previously calculated as 44.3 million. (Gstrauss (talk) 06:18, 3 April 2008 (UTC))

Nice
All the critism aside, this article is a gem; very insightful to how actually valuation is currently done. DvK (talk) 23:20, 16 October 2012 (UTC)

Download UBS paper
Why is the link to the UBS paper directing to Scribd? Downloading the paper there requires an account. This is surely not in line with Wikipedia's link policy. — Preceding unsigned comment added by 2A02:AA16:1102:C400:E898:FDB3:4788:6518 (talk) 18:50, 13 June 2017 (UTC)

Some literature
This page lacks citations. Here are some basic readings that may be useful:

Fernández, F. L., Fernández, P., Fernandez, P., & López, P. F. (2002). Valuation methods and shareholder value creation. Academic Press.

Fernández, P. (2007). Company valuation methods. The most common errors in valuations. IESE Business School, 449, 1-27.

Fernandez, P. (2007). Valuing companies by cash flow discounting: ten methods and nine theories. Managerial Finance.

Fernandez, P. (2001). Valuation using multiples. How do analysts reach their conclusions. IESE Business School, 1, 1-13.

Koller, T., Goedhart, M., & Wessels, D. (2010). Valuation: measuring and managing the value of companies (Vol. 499). john Wiley and sons.

Koller, T. (1994). What is value-based management?. McKinsey quarterly, 87-87.

Koller, T., Goedhart, M., & Wessels, D. (2005). The right role for multiples in valuation. McKinsey on Finance, (15), 7-11.

Matschke, M. J., Brösel, G., & Matschke, X. (2010). Fundamentals of functional business valuation. Journal of Business Valuation and Economic Loss Analysis, 5(1).

Liu, J., Nissim, D., & Thomas, J. (2002). Equity valuation using multiples. Journal of Accounting Research, 40(1), 135-172.

Reilly, R. F., & Schweihs, R. P. (2004). The handbook of business valuation and intellectual property analysis. McGraw Hill.

Schreiner, A. (2009). Equity valuation using multiples: an empirical investigation. Springer Science & Business Media. Topjur01 (talk) 15:04, 15 November 2021 (UTC)