In the market sometimes ‘multiples’ are used. Examples of this include valuations based on rate/profit ratios, turnover, number of members or clients, gross margin, amount of staff members, etc. The use hereof has the advantage that companies from the same industry sector can thus be mutually compared rather easily.
The method offers a first notion of the value, making use of mostly publicly available data. The disadvantage of this method is that mutual differences between companies are disregarded, that insufficient insight is provided in the forecasts, and that often founded insight in the value of even the company taken as ‘benchmark’ is lacking.
