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Definition of Multiples method - Finance dictionary
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Multiples method (See Chapter 32 of the Vernimmen)
The multiples method for valuing a company is based not on the Value of Operating assets and Liabilities per se, but on the overall returns they are expected to generate. The Value of a company is derived by applying a certain multiplier to the company's Profitability parameters. There are two multiples methods: based on Market multiples and based on transaction multiples. Multiples method is also called the peer comparison method.
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Multiples method (See Chapter 32 of the Vernimmen)
The multiples method for valuing a company is based not on the Value of Operating assets and Liabilities per se, but on the overall returns they are expected to generate. The Value of a company is derived by applying a certain multiplier to the company's Profitability parameters. There are two multiples methods: based on Market multiples and based on transaction multiples. Multiples method is also called the peer comparison method.
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