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Courses > Valuation > Comparable Company Analysis > Comparable Companies Valuation

Comparable Companies Valuation1 dayClassroom
Introductory/Intermediate


Participants learn both the concepts and the practice of valuing companies based on similar enterprises. You’ll practice techniques for "cleaning" and "normalizing" data in order to create usable comparables in producing an Excel valuation model for corporate finance, M&A, LBO and other transactions.

The Valuation Roadmap

  • Understanding the conceptual linkage between accounting value drivers and the associated value
  • Understanding the underlying concept of multiples and how they are used in comparable company analysis
  • Understanding how to establish Enterprise Value
  • Understanding how to disaggregate equity value from Enterprise Value

Multiple Valuations

  • Understanding the issues in establishing the comps set of companies
  • Understanding Equity and Enterprise multiples
  • Understanding the factors to consider when selecting the best multiples to use

Equity Multiples

  • The PE ratio and what drives the PE
  • The PE, growth and PEG ratios
  • Dealing with options and dilution
  • Normalizing or "cleaning" the numbers for non-recurring items
  • Calendarizing the earnings for the comps set of companies
  • Latest twelve months analysis
  • The price to book ratio and returns on equity
  • Prospective/forward multiples and historic or trailing multiples
  • Review of limitations and drawbacks of the equity multiples

Enterprise Multiples

  • Understanding the rationale behind the use of enterprise multiples
  • Calculating and decomposing Enterprise Value with complex capital and group structures
  • Cleaning the financial data for non-trend items and mismatches

Comparables Complexities

  • Dealing with investments held at cost
  • Equity investments and equity income
  • Controlled versus consolidated EBIT and EBITDA
  • Adjusting multiples for non-capitalized leases
  • Dealing with Minority Interests

Transaction Multiples

  • Understanding transaction multiples
  • Data sources to identify appropriate transaction comparables

Case Study

Using real financial data, participants are expected to extract appropriate financial data for a comparable set of companies, clean the numbers for mismatches and non-trend items, and build Equity and Enterprise values from the information provided.

  • Participants build an Excel model to produce a valuation range for the case study company.

You can call Matchett on +44 (0)1295 256161 to book a course or simply discuss your training needs OR email us:

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Related Courses

Learn to adjust multiples so they are really comparable.

Pre-requisites

Basic financial accounting and Excel modelling skills

Delegate Profile

Anyone who needs to value companies for investment banking or investment management purposes