Using ARIMA Model to Determine the Growth Rate of Net Income
Using ARIMA Model to Determine the Growth Rate of Net Income

Summary/Abstract: Even though there are many methods used to value shares and companies, most of them fail to give a realistic value to the company being evaluated. More and more, the specialists start to use relative valuation as being one of the most correct methods in determining share and business value. At theoretical and empirical level, most of the research are focused on the accuracy of determining multiples and comparable company group selection. The objective of this paper is to provide an insight in determining the PER using the growth rate of forecast net income obtained using ARIMA model. In the research paper we illustrate this process. In a future research we will use PER calculated using growing rate to estimate value to shareholders. This paper encourages researchers to use statistical tools in business valuation field.

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