This comparable company analysis template demonstrates how to compute and compare 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.
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.
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.
In Excel, you will create a table that lists all the relevant information about the companies you’re going to analyze.
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.
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