Abstract

The purpose of this study is to examine if there is a statistically significant difference between price to earnings (P/E) ratios and price to gross sales (P/G) ratios based on the size of companies and selected standard industrial classification (SIC) codes by the leading two digits of the Standard Industrial Classification (SIC) code. Approximately 18,000 cases of privately held business sales transactions were compared to nearly 20,000 randomly selected public stock price data to compare and test. A Kruskal-Wallis nonparametric test, multivariate analysis of variance (MANOVA) tests, and t tests were utilized to investigate for significant differences in P/E and P/G ratios based on size and SIC code. The findings of the study were that there was a statistically significant difference in P/E and P/G ratios based both on size and selected SIC codes.