2.1.3. Market multiples

Market multiples are based on the observation of similar assets, reflecting an inference that these should be traded in close values. It implies a comparative relationship between a specific variable (operational, margins, cash flow, etc.) between companies, sectors and markets.

Be aware: although multiples are largely used by investors, they are often not considered as a proper valuation methodology.

Next Section: 2.1.4. Financial instruments valuation