This comparable company analysis template demonstrates how to compute and compare the valuation ratios of industry competitors.
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Comparable company analysis (or “comps” for short) is a valuation methodology that looks at ratios of similar public companies and uses them to derive the value of another business. Comps is a relative form of valuation, unlike a discounted cash flow (DCF) analysis, which is an intrinsic form of valuation.
Steps in Performing Comparable Company Analysis
#1 Find the right comparable companies
Compile a list of companies operating in the same industry with similar characteristics based on criteria including industry classification, geography, size, growth rate, margins, and profitability.
#2 Gather financial information
Once you’ve found the list of companies that you feel are most relevant to the company you’re trying to value, it’s time to gather their financial information.
#3 Set up the comps table
In Excel, you will create a table that lists all the relevant information about the companies you’re going to analyze.
#4 Calculate the comparable ratios
With a combination of historical financials and analyst estimates populated in the comps table, you can start calculating the various ratios that will be used to value the companies.
#5 Use the multiples from the comparable companies to value the company
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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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