Archive of Journal - Financing

Financing – scientific magazine for economy

ISSUE 2021, No. 3, Article 4, Year of publication: 12, September, 2021
Comparability of enterprises in the function of applying EBITDA multiplier methods for enterprise valuation


Dušan Saković, PhD*

*PhD, Assistant Professor, University of Novi Sad, Faculty of Economics in Subotica, Department for Accounting and Business Finance



The paper investigates the success of estimating the value of enterprises using EV/EBITDA multiplier model in order to assess the degree of comparability of enterprises operating within the same industry, ie having the same activity code. The criterion for assessing the quality of the estimated value of each model, as well as multiplier model, is the relative error of the assessment, which represents the deviation of the determined value of the model from the actual market value. The main characteristic of the EV/ EBITDA multiplier model is that the determination of the value of the target company is based on values comparable to it. The fact that the relative error of the assessment is smaller, means that there is a higher degree of comparability between the companies used in the valuation process. The research was conducted on a sample of companies operating within the telecommunications industry. The results of the research indicate that when it comes to the European market, we can conclude that there is no high degree of comparability between companies that operate under the same code of activity.

Keywords: comparability, EV/EBITDA multiplier, value estimation

DOI: 10.7251/FIN2103041S

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