We are delighted to continue our series of research findings sharing, a data analytics project that examines the strength of relationship between revenue and market capitalsation of US listed firms. In this summary, we invite you to join us in exploring the insightful research findings of Miss. Joey Ko, a research intern from University of Melbourne
Data Analytics Project – The effect of revenue level on market capitalization of US listed firms
Research Rationale
Market capitalization and total revenue are selected to further investigate the effect of company size on overall financial performance of a firm
Objectives
The research is to examine how strong is the relationship of market capitalization and total revenue.
Conclusion
As expected, firms with higher revenue generation are correlated with larger market capitalisation. This is just a starting point, the research can be extended to compare the level of correlation for different industries, different market etc. in order to explore the strength of using revenue multiple in market approach for a specific industry.
The high R square also supports the use of revenue as a key variable to estimate valuation of a company
We would like to acknowledge and commend Joey for her commitment and valuable contributions during her internship at Valtech Valuation. Her diligent efforts in exploring research findings and her ability to develop insightful models have greatly enhanced our research endeavors. We extend our best wishes to Joey as she embarks on the next chapter of her career journey.
