Comps Analysis:= comparing companies with multiples.

More growth potential = Better.

But make sure that the companies being compared are similar in size/industry/geographic regions.

Multiples Analysis

using the ratios of accounting line items (like EBITDA, income, etc.) to evaluate the potential growth of a firm.

  • Ratios are calculated from estimations of future balance sheet line items.
  • We use rate of return to compare investments, not price. . You can’t compare price.

The following are commonly used multiples:

Accounting Sheets