The Accuracies of Different Valuation Multiples (Ratios)
January 23, 2007 - Fundamental Valuation
How well do commonly used valuation multiples align with actual stock prices? In their January 2007 paper entitled “Multiples and Their Valuation Accuracy in European Equity Markets”, Andreas Schreiner and Klaus Spremann investigate the accuracy of the valuation multiple method in general and the properties of 50 different multiples (see the figure below). They define… Keep Reading