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Article

MARKET MULTIPLES ADJUSTMENTS FOR DIFFERENCES IN RISK PROFILE – AN AIRLINE COMPANY EXAMPLE

DOI: 10.7708/ijtte.2015.5(1).03


5 / 1 / 17-28 Pages

Author(s)

Nina Milenković - KPMG LLC Belgrade, Kraljice Natalije 11, 11000 Belgrade, Serbia -


Abstract

Companies whose data can be found in databases usually are not comparable enough to the valuation subject to assure direct use of their multiples (i.e. to assure reliability of valuation resulting from direct use of their multiples). Key differences usually relate to size, but also to other characteristics (financial performance, territory, business profile, expected growth, etc.), all of impact on specific risks. This paper shows how to adjust multiples for risk profile differences to achieve satisfactory level of comparability and consequent reliability of valuation on the example of airline company.


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