EVOLUTION AND VOLATILITY OF ECONOMIC MULTIPLE VALUE 2005-2015: A COMPARATIVE ANALYSIS

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Abstract

The papers analyzes economic multiple evolution and volatility over ten years. Specifically, the paper investigates the evolution of EV/EBITDA and EV/EBIT multiples value in the period 2005-2015 and demonstrates that: (a) EV/EBITDA and EV/EBIT multiples present an appreciable level of volatility from year to year; (b) EV/EBIT multiple presents a standard deviation higher than that of the EV/EBITDA and (b) EV/EBITDA multiple presents a linear correlation with the beta risk coefficient higher than that of the EV/EBIT. The analysis concerns multiples that refer to the North American market, as it constitutes a relatively homogeneous context from regulatory and GAAP-application points of view, and a reliable and comprehensive time series is available. multiples do not refer to specific companies, but to average sector values, as identified by Bloomberg and Datastream.

Keywords: Corporate Valuation, Multiples, Volatility, EV/EBITDA, EV/EBIT

How to cite this paper: Fazzini, M. (2016). Evolution and volatility of economic multiple value 2005-2015: A comparative analysis. Corporate Ownership & Control, 14(1-4), 663-672. https://doi.org/10.22495/cocv14i1c4art13