| Issue |
SHS Web Conf.
Volume 34, 2017
The 17th Annual Conference of the Asian Academic Accounting Association (2016 FourA Conference)
|
|
|---|---|---|
| Article Number | 03002 | |
| Number of page(s) | 6 | |
| Section | Corporate Finance and Capital Markets | |
| DOI | https://doi.org/10.1051/shsconf/20173403002 | |
| Published online | 14 February 2017 | |
Improved Accuracy of Ratio Multiple Valuation
1 Accounting Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia
2 Universitas Gadjah Mada, Indonesia
* Corresponding author: julianto.agung@mail.ugm.ac.id
Multiple valuation is widely used by investors and practitioners but its accuracy is questionable. Multiple valuation inaccuracies are due to unreliability of information used in valuation, inaccuracies comparison group selection, and use of individual multiple values. This study investigated the accuracy of valuation to examine factors that can increase the accuracy of the valuation of multiple ratios, that are discretionary accruals, the comparison group, and the composite of multiple valuation. These results indicate that multiple value adjustment method with discretionary accruals provides better accuracy, the industry comparator group method combined with the size and growth of companies also provide better accuracy. Composite of individual multiple valuation gives the best accuracy. If all of these factors combined, the accuracy of valuation of multiple ratios will give the best results.
© The Authors, published by EDP Sciences, 2017
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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