Another Case on Discounted FCF vs. P2S Valuation: Privately Held Food & Drinks Firms in Greece

Abstract

This paper is a step-by-step attempt in applying two different valuation methodologies on privately held firms in Greece. Initially the two methodologies—free cash flows to equity and the price-to-sales multiple (P2S)—are being explained. These two models are further developed under the Greek accounting standards (especially the first model, being a more fundamental approach), in order to be applied afterwards more correctly to Greek firms’ data, leading to adjusted forms. The application of these two models comes right next upon privately held food & drinks firms’ financial statements, collected for each year (2013 up to 2015). The final step consists of the analysis and discussion of the results with the help of descriptive statistics (frequencies), as well as the pearson statistic, as a simple correlation tool.