Need help in finding the best papers related to the above question.
Thank you.
You would have to be led by the literature so determine that. However, as a rule of thumb profitability, return on investment and liquidity ratios are important in most manufacturing sectors.
Hi! As I don't know which industry you analyse, it's difficult to help. But here are some useful papers on the topic:
Lie, E., & Lie, H. J. (2002). Multiples used to estimate corporate value. Financial Analysts Journal, 58(2), 44-54.
Fernandez, P. (2001). Valuation using multiples. How do analysts reach their conclusions. IESE Business School, 1, 1-13.
Holthausen, R. W., & Zmijewski, M. E. (2012). Valuation with Market Multiples: How to Avoid Pitfalls When Identifying and Using Comparable Companies 1. Journal of Applied Corporate Finance, 24(3), 26-38.
All of them can be found in Google Scholar.
Good luck!
Hi Tatiana, thank you so much for your help. The research is not (at this stage) focused on a specific industry or sector. The idea is to understand which are the most used multiplies either by accountants and by Asset managers.
Then, once we get list of the most common ones, try to figure out a different approach using different Financial Statements' numbers and make regressions controlling for other variables. By the Practitioners' point of view, do you have any other papers/researches to suggest me?
Thank you again for your help!
Hi Tatiana, me again, the first and third one are to purchase only. Is it any other source I cn search them for free?
Thank you
May I suggest this is a weird research angle? If a pure quant method would work it would be adopted by hedge funds therefore soon it would be arbitrated and not work any longer.
An alternative angle: as you know from your classes the most basic valuation method is DCF. This is based on forecasting a variable number of years in the future, followed by a terminal value (when profitability is stable, industry mature, a few players with stable market share). Then the terminal value has far more importance than the value from discounting forecast years. Of course making a decent forecast as to when the industry will stabilise and who will have what market share and what profitability is anything but a numbers game.
Hi François, thank you for your helpful answer. Sure, what you say it's true.
But as soon as I don't try to see if a different approach could be feasible, I will never know the outcomes. Surely the period we are facing it's not the best one for such a research so I will probably focus on pre-Covid data.
Thank you again for your help.
Ale
Business processes in industrial enterprises are closely related to the introduction of new methods, technologies, management and accounting tools aimed at adapting business entities to the changing conditions of the external environment and the full realization of their production and potentials, and those that allow an industrial enterprise to obtain other competitive advantages.
Nataliya Vasilevna KIM, Alkarawy Heyder G WANNES. Outsourcing: The Improvement of Accounting System. Journal of Applied Economic Sciences (JAES). No: 42, pp. 740-742
Yes, includes groups: performance indicators; competitive indicators
There are many ways that can be used to evaluate enterprise. As far as I am concerned, you can use either the earning method that deals with performance in terms of profitability or the cash flow ratios method which deals with liquidity. As you know profitability and liquidity are not the same.
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