Valuing biotechnology companies using the price earnings ratio

The Long-Term Price-Earnings Ratio

Determinants of the Price-to-Earnings Ratio

We examine a firm’s P/E ratio in the context of a model wherein firms make sequential investments in production capacity. In addition to investment growth, our analysis seeks to identify pricing power in the firm’s product markets and accounting conservatism as determinants of the P/E ratio. A benchmark result demonstrates that, given unbiased accounting, the firm’s P/E ratio can be expressed a...

An Investigation of Relationship between Earnings Conservatism and Price to Book Ratio Based on Basu’s Method

One of the most important concepts in financial statement analysis and evaluation is conservatism. Thus recognition of the factors which influence conservatism can considerably help the investor in managing the selection of more conservative assets properly and avoiding the untrue exposure of financial statements. This research is about to consider the relation of effective factors on organizat...

Commercialization Strategies of Biotechnology Companies

In the biotechnology industry today, there are many business models for project commercialization. These models range from independent vertical integration to certain forms of collaboration with pharmaceutical companies to complete acquisitions of projects by the big pharmaceutical companies. In this thesis, we wanted to study commercialization strategies of several biotechnology companies. We ...

Valuing Companies—an Overview of Analytical Approaches

This technical note was prepared by Robert S. Harris. This technical note was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Support for this work came from funds provided the Darden Foundation and the TVA. Copyright  1997 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights ...