Valuing an Italian company with multiples — enterprise value and equity value
Under the multiples approach, the business is worth the multiple times a figure from the accounts (MOL, operating profit or sales); the shareholders' equity is that amount minus the net financial position, meaning financial debt less cash. At 6 times a €500,000 MOL the business is worth €3 million; with a €600,000 net financial position the equity comes to €2.4 million. Article 2437-ter of the Civil Code lists the criteria to weigh, not the multiple itself.
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Sources and assumptions
Calculation assumptions
- You pick the multiple. No official public source sets sector multiples, and the Civil Code only names the factors to weigh: asset base, earnings outlook and any market value.
- The figures follow the statutory accounts layout: sales are line A1 of the income statement, operating profit is A minus B, and MOL is that difference with the depreciation and amortisation of line B10 added back.
- The net financial position adds up bonds, shareholder loans, bank debt and other lenders (lines D1 to D5) and subtracts cash at bank and in hand (line C.IV).
- Not applied: adjustments to the figures, control premiums, minority or illiquidity discounts, other valuation methods, and any tax due on a sale.
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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.