Market multiples are widely accepted as barometers for company valuations; they influence a wide range of strategic decisions since many companies use them to benchmark themselves against competitors and to evaluate potential M&A opportunities.

Such a reliance on multiples in corporate and market decision-making makes it important to understand the mechanics behind market multiples and, in doing so, demonstrate the levers companies can pull to help drive their multiples in the right direction.

In this paper, we demonstrate that market multiples aren鈥檛 a mystery. Instead, they reflect the market鈥檚 expectations and understanding of a company鈥檚 growth potential, its profitability (as measured by returns on capital), its strategic focus and its ability to properly communicate its story. Knowing these elements gives corporate executives the keys they need to unlock higher valuations.

听听

What really drives a company鈥檚 valuation?听

The answer lies in the intersection of fundamentals and narrative.

We delve into the impact narrative has on company valuation and the mechanics behind market multiplies influencing operating performance.

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