"Putting Ratios into a Firm Value Context for Entrepreneurs and Entrepr" by Tom Arnold

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Article Title

Putting Ratios into a Firm Value Context for Entrepreneurs and Entrepreneurship Students

Authors

Tom Arnold, University of Richmond

Abstract

Ratio analysis is generally presented as something that has to be calculated after completing other financial statements and is generally viewed, particularly by students, as busy-work with little value. This paper changes the context of ratio analysis in order to demonstrate how a focus on the information provided by ratios adds to the value of the firm. By dissecting the valuation of a publicly traded firm using a price to earnings ratio multiplier, value generating factors in the form of ratios, can be inferred for smaller non-publicly traded ventures.

JEL Codes

A22, A23, G30, M13

Keywords

Ratio Analysis, Valuation

Recommended Citation

Arnold, Tom (2011) "Putting Ratios into a Firm Value Context for Entrepreneurs and Entrepreneurship Students," The Journal of Entrepreneurial Finance: Vol. 15: Iss. 2, pp. 23-28.
Available at: https://digitalcommons.pepperdine.edu/jef/vol15/iss2/2

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