Truncated distributions of valuation multiples: an application to European food firms

Javier Ribal, Ana Blasco and Baldomero Segura

International Journal of Mathematics in Operational Research, 2009, vol. 1, issue 4, 419-432

Abstract: Company valuation is increasingly used in company management for various purposes. However, in Spain, information that is useful for small and medium-sized enterprises (SMEs) is non-existent. In order to broaden this information, a mass model for valuation of companies is proposed to enable valuation multiples to be obtained. This model has been applied to SMEs in the food sector in Spain. However, the asymmetry of the distributions obtained causes an upwards bias of the mean multiples and makes it difficult to establish statistically significant differences between the distributions. To solve this problem, an algorithm to eliminate outliers has been designed which enables the most probable range of values to be obtained for each multiple. The multiples obtained are compared with the multiples for European food companies listed on the stock market, revealing statistically significant differences.

Keywords: asymmetric distributions; DCF; discounted cash flow; firms valuation; food industry; truncated distributions; valuation multiples; company valuation; Spain; small and medium-sized enterprises; SMEs; Europe. (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=26275 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmore:v:1:y:2009:i:4:p:419-432

Access Statistics for this article

More articles in International Journal of Mathematics in Operational Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().