Methodology

GILD 100 ranks companies according to the estimated value of their equity based on the assumption the companies were traded on the Tallinn Stock Exchange at the date of the ranking.

Hitherto published rankings rely mostly on relative assessment, comparing  the results of a business with its own earlier results. GILD 100 is prepared on different grounds, attempting to assess the absolute monetary value of the businesses. The GILD 100 shows where the corporate wealth of Estonian enterprises lies.

In interpreting the results of the GILD 100 following aspects should be considered:

1. This is not company takeover value, or in other words, there is no reason to presume, that the acquisition price of the company  will be close to the value indicated in the ranking.
   
   
2. Our assessment of the market capitalisation of the business does not take into consideration the size of the business and its probable liquidity on the secondary market. Both these aspects impact actual stock exchange prices.
   
   
3. We have not adjusted the value judgements for any business-specific risks, e.g. the competence of management, dependence on major suppliers or customers, cooperation between principal owners, and other such circumstances. The value judgements have been stated on the assumption that the business is a going concern.

Criteria and Assessment

The list of the one hundred largest companies in Estonia is based on profit-making organisations registered in the Commercial Register. The companies assessed include inter alia, publicly traded companies, state enterprises and joint undertakings. Branches of foreign companies and organisations that are not directly profit-oriented are omitted. As the objective is to rank businesses according to the estimated stock market value of their equity, we assess the parent company as a rule in case of subsidiaries. Exceptions are made where the estimated market value of any subsidiary (controlled company) turns out to be larger separately than the market value of the group as a whole.

Taking into consideration the scope of the work and the intention of GILD Bankers to give as impartial and objective assessment to the market value of the business as possible, we have decided to use the comparative valuation method.

In the case of comparative valuation, the judgement on the value of the business is based on the values of similar public companies already assessed by the market (peer group). For the businesses in the peer group, year-end value multiples are calculated. In most cases, GILD Bankers uses enterprise value multiples (EV/EBITDA or EV/EBIT). The median values of these multiples are in turn applied to the adjusted financial results of the business assessed, deriving the value of the business.