Market multiple method
Market multiple method is a method that multiplies a market determined ratio (called a multiple) to some value of the target firm to estimate the target's value. The market multiple can be based on net income, earnings per share, sales, book value, or number of subscribers.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Market multiple method. Multiplies a market determined ratio (called a multiple) to some value of the target firm to estimate the target's value. The market multiple can be based on net income, earnings per share, sales, book value, or number of subscribers.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
