Comparable Company Analysis (“Comps” or “Trading Multiples”) is a relative valuation framework that values a firm by comparing its financial metrics to public peer companies operating in the same industry.

Core Mechanics

• Peer Group Selection: Screening for peers based on sector, business model, size, growth rates, margins, and capital structures.
• Valuation Multiples: Calculating operational ratios that standardize value comparisons. EV multiples (e.g., EV/EBITDA) isolate business performance regardless of capital structure, while Equity multiples (e.g., P/E) reflect capital structure choices.
• Standardization: Expressing the peer data as minimum, median, and maximum multiples to apply against the target firm’s underlying financial results.