Relationship Between the Company Size and the Value: Empirical Evidence

Přemysl Krch ()
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Přemysl Krch: University of Economics in Prague

A chapter in The Impact of Globalization on International Finance and Accounting, 2018, pp 145-152 from Springer

Abstract: 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.

Keywords: Valuation; Value; Size premium; Germany; Multiples (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-68762-9_16

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DOI: 10.1007/978-3-319-68762-9_16

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