+7 925 966 4690, 9am6pm (GMT+3), Monday – Friday
Russian version 






Digest Finance

Revenue-Based Multipliers as an Indicator of the Investment Attractiveness of Domestic Vertically Integrated Oil and Gas Companies

Vol. 27, Iss. 2, JUNE 2022

PDF  Article PDF Version

Received: 24 February 2022

Received in revised form: 16 March 2022

Accepted: 30 March 2022

Available online: 4 July 2022


JEL Classification: G32, L25, L71, M41, O12

Pages: 130151


Oleg V. SHIMKO Center for Innovative Economics and Industrial Policy, Institute of Economics of Russian Academy of Sciences (IE RAS), Balashikha, Moscow Oblast, Russian Federation


Subject. This article focuses on the ratios of market capitalization or enterprise value to net revenue from core activities of the twenty five leading publicly traded oil and gas companies within 2008 through 2018.
Objectives. The article aims to identify key trends in the considered ratios of the oil and gas industry corporations and in the ratio changes within the studied period, and identify the factors that have caused these changes.
Methods. For the study, I used comparative, and financial and economic analyses, and generalization of materials of the companies' consolidated financial statements.
Results. Revenue-based ratios are found to be applicable to assess the value of oil and gas companies. Companies with better profitability have higher multiplier values with a similar net revenue structure. It was determined that integrated corporations usually lag behind independent companies in terms of multiples. It was found that the output of oil products from purchased raw materials is estimated by market to be lower than products produced from own resources. The presence of resale in the revenue structure reduces the multiplier value. The debt burden growth contributes to the multiplier reduction. Therefore, in multiplier, it is advisable to use the enterprise value indicator that includes net debt instead of market capitalization with a significant difference in the debt component. The found country factor should be taken into account when using the multiplier.
Conclusions and Relevance. The use of revenue-based multipliers requires a thorough analysis of the financial and business operations of companies. However, it is quite acceptable if the overall profitability decreases and the debt burden increases in the stock market segment of the global oil and gas industry. The results of the study can be used to assess the value of oil and gas assets as part of a comparative approach and develop measures to increase the market capitalization of publicly traded oil and gas corporations.

Keywords: revenue, valuation, comparative approach, multiplier, oil and gas industry


  1. Minasyan V.B. [Assessment of risks arising from the use of multiplier technology to assess the shares]. Finansy: teoriya i praktika = Finance: Theory and Practice, 2018, vol. 22, no. 3, pp. 124135. (In Russ.) URL: Link
  2. Minasyan V.B., Ivko D.G. [Model risk analysis of multiplier technology applied at stock valuation of Russian companies]. Finansy: teoriya i praktika = Finance: Theory and Practice, 2019, vol. 23, no. 6, pp. 91116. (In Russ.) URL: Link
  3. Timofeev D.V. [Country risk premium in emerging markets]. Korporativnye finansy = Journal of Corporate Finance Research, 2015, vol. 9, no. 2, pp. 5475. (In Russ.) URL: Link
  4. Khalikova M.A., Belai I.E., Galimzyanov R.N. [The evaluation of a controlling stake of the oil company]. Internetzhurnal Naukovedenie, 2016, vol. 8, no. 3. (In Russ.) URL: Link
  5. Nazarova V.V., Shevyakina O.R. [Determination of an optimum premium paid in M&A transactions in oil and gas section]. Korporativnye finansy = Journal of Corporate Finance Research, 2015, vol. 9, no. 4, pp. 530. (In Russ.) URL: Link
  6. Lipatnikov V.S., Kirsanova K.A. [Assessment of the impact of the adverse economic geopolitical environment on the worth of Russian oil and gas companies]. Upravlencheskie nauki = Management Sciences, 2018, vol. 8, no. 2, pp. 3043. (In Russ.) URL: Link
  7. Kozlova A.S., Odinokova K.A., Taraskin D.S. [Most popular approaches to valuation of public companies]. Vestnik Saratovskogo gosudarstvennogo sotsial'noekonomicheskogo universiteta = Bulletin of Saratov State SocioEconomic University, 2019, no. 1, pp. 105111. URL: Link (In Russ.)
  8. Skavysh I.A. [The effectiveness of using industryspecific multipliers versus universal multipliers]. Finansovoe pravo i upravlenie, 2017, no. 1, pp. 110. (In Russ.) URL: Link
  9. Kokin A.S., Oskolkov I.M., Syzganova A.A. [Comparative approach to estimation of cost of stocks of the oil and gas companies of Russia on the basis of the fundamental analysis]. Ekonomika: vchera, segodnya, zavtra = Economics: Yesterday, Today and Tomorrow, 2019, vol. 9, no. 11, pp. 241258. URL: Link (In Russ.)
  10. Tatarintseva S.G., Samoilov N.A., Udalova D.V. [Financial control of indicators of investment attractiveness of a corporation in the accounting and value model]. Innovatsionnoe razvitie ekonomiki = Innovative Development of Economy, 2019, no. 1, pp. 210216. URL: Link (In Russ.)
  11. Usmanova A.S., Nesterenko E.A., Taraskin D.S. [Valuation of public companies in Russia by business sector]. Vestnik Saratovskogo gosudarstvennogo sotsial'noekonomicheskogo universiteta = Bulletin of Saratov State SocioEconomic University, 2020, no. 2, pp. 103107. URL: Link (In Russ.)
  12. Ivko D.G. [Peculiarities of assessing Russian companies' value by using the method of market multipliers]. Finansy i upravlenie = Finance and Management, 2017, no. 1, pp. 3446. (In Russ.) URL: Link
  13. Ivko D.G. [Estimating Russian company value: Risks related to using the method of market multipliers]. Finansy i upravlenie = Finance and Management, 2018, no. 1, pp. 822. (In Russ.) URL: Link
  14. Basiladze G.R. [Comparative analysis of investment appeal of PJSC Lukoil, PJSC Rosneft, PJSC Gazprom]. Gumanitarnye, sotsial'noekonomicheskie i obshchestvennye nauki = Humanities, SocialEconomic and Social Sciences, 2017, no. 1, pp. 145147. URL: Link (In Russ.)
  15. Ponomareva S.V., Zheleznova I.V. [Features of share buybacks in Russia]. Vestnik Permskogo natsional'nogo issledovatel'skogo politekhnicheskogo universiteta. Sotsial'noekonomicheskie nauki = PNRPU Sociology and Economics Bulletin, 2017, no. 2, pp. 165178. URL: Link (In Russ.)
  16. Dorofeeva K.A. [Organization of internal financial control in nonfinance corporations]. Izvestiâ SanktPeterburgskogo gosudarstvennogo èkonomičeskogo universiteta, 2020, no. 4, pp. 108113. URL: Link (In Russ.)
  17. Yurlov F.F., Kornilov D.A., Kornilova E.V., Plekhanova A.F. [Comparative evaluation of efficiency of large companies oil and gas sector]. Vestnik NGIEI = Bulletin NGIEI, 2020, no. 7, pp. 8392. URL: Link (In Russ.)
  18. Vasil'eva E.V., Petrova S.B. [Strategic analysis of factors affecting the development of oil and gas corporations in Russia]. Vestnik Ekaterininskogo instituta = Bulletin of Catherine the Great National Institute, 2015, no. 2, pp. 814. (In Russ.)
  19. Shimko O.V. Analiz rezul'tatov finansovokhozyaistvennoi deyatel'nosti vedushchikh publichnykh korporatsii neftegazovoi otrasli posle mirovogo finansovogo krizisa [An analysis of the results of financial and economic activities of leading public corporations in the oil and gas industry after the global financial crisis]. Moscow, Nauka Publ., 2019, 339 p.
  20. Shimko O.V. Sovremennye osobennosti otsenki stoimosti neftegazovykh korporatsii sravnitel'nym podkhodom: monografiya [Modern features of valuation of oil and gas corporations by a comparative approach: a monograph]. Moscow, Mezhdunarodnye otnosheniya Publ., 2018, 252 p.

View all articles of issue


ISSN 2311-9438 (Online)
ISSN 2073-8005 (Print)

Journal current issue

Vol. 27, Iss. 2
June 2022