Public Comparables

Question 1

what is a pub comp

Answer 1

at its basic, it is comparing key ratios with other companies publically listed

Question 2

what are the main ratios

Answer 2

equity ratios being PE, EPS, PEG and market value/book value, market value/net income
enterprise values such as ev/ebit ev/ebitda ev over sales

Question 3

what is the process for completing a public comparable

Answer 3

Compile a list of public companies in similar industry/size
narrow down to have 5-10 companies with similar revenues, market cap, industries and geographical locations
decide the multiple to use
calculate average multiple values for the public companies and the relevant value for your company
apply the average multiple to your company to gain an idea of how it would be valued in the public market