Comparable Company Trading Analysis (‘Comps’) is the most basic but effective valuation tool used by investment bankers and analyst. This technique used in all kinds of valuations. For example:- Private market valuation, IPO valuation, comparative analysis, identifying potential targets for M&A etc.
Establishes value of A Company and measures its performance vis-à-vis the operating and trading statistics of company’s peer group
The participants are first explained how to select the Peer Group (Comparables) before building the Models for Relative Valuation. In this part of the Program, we shall learn to design the real Template for Trading Combs which is actually used various Research companies.
Then we shall take 10 companies from world over for relative valuations.
Then participants are directed to build superb comps models in Excel from scratch, using real case studies, industry best practices, and sensitivity analyses.
This model includes Switches, Output sheet, Valuations sheets, Currency Converter and forecasts.
Key Learning Outcomes
- Participants learn to select appropriate comparable companies by evaluating operational, financial, size, and other similarities
- Set evaluation benchmarks & select comparable companies
- Gather appropriate financial history and projections
- Normalizing operating results and calculating LTM operating results
- Exclude nonrecurring charges, normalize for stock option expense
- Standardize various expense classifications including FIFO to LIFO inventory accounting
- Calculate shares outstanding using the treasury stock method
- Input financial data & calculate and interpret financial and market ratios
- Presenting trading comps by structuring output schedule
- Selecting and Evaluating Appropriate Multiples (P/E Trailing and forward, EBIT Multiple, EBITDA Multiple, P/B Multiple, Revenue Multiple, PEG)
- Calculate and interpret financial and market ratios Common analytical challenges including Calandarization, nonrecurring items, dilutive securities, and classification issues are addressed using industry best practices.