Comparable Company Analysis Excel Walkthrough | Valuation Multiples
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Learn comparable companies analysis, also known as comps or multiples valuation.
🆓 DOWNLOAD Free Excel file for this video: https://view.flodesk.com/pages/624462...
Comparable companies valuation is a valuation method that compares multiples of similar companies to determine a valuation range for a target business. This is a relative valuation method, meaning it's based on the market as opposed to the intrinsic value of the target company.
The following are the steps we take:
1. Select the comparable companies: find 5-10 companies that are comparable based on industry, growth, credit risk etc.
2. Gathering financials and calculating multiples: Find revenues, EBITDAs, earnings, etc. to calculate multiples such as EV/Revenue, EV/EBITDA, P/E etc.
3. Benchmark the multiples: calculate the average, median, high, low, and quartiles to see multiple ranges
4. Determine a valuation range: Calculate the enterprise or equity value and eventually reach an implied share price
5. Simplifications for the model: Factors we need to consider such as calendarization, shares outstanding etc.
You can follow along and practice using the excel valuation template above.
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Chapters:
0:00 - What is a Comparable Companies Valuation?
1:49 - Selecting the comparable companies
3:16 - Gathering financials and calculating multiples
7:28 - Benchmark the multiples
8:58 - Determine a valuation range
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