How to Calculate Metrics for Company Comparable?
Company comparable analysis provides information on your company’s performance and market position. This tool can assess your company’s strengths, weaknesses, and growth prospects by comparing it to other public companies.
Note: The company comparable feature is only available for premium account holders. Kindly upgrade your account to unlock this feature.
When choosing public companies for comparative analysis, there are two options – Eqvista List and Public List.
Once you have selected the companies, you will be redirected to the results page, which displays various metrics for comparing with selected public companies.
1. Valuation Metrics
Valuation metrics are ratios used to assess a company’s value, financial health, and growth potential. These metrics help investors and analysts determine whether a company is overvalued, undervalued, or fairly valued.
Sales Multiple
Compares your company’s market capitalization to its annual sales revenue. A higher sales multiple indicates that investors are willing to pay more for revenue generated by your company.
Sales Multiple (P/S) = Market Capitalization/Total Sales
EBITDA Multiple
Compares your company’s market capitalization to its EBITDA i.e. earnings before interest, taxes, depreciation, and amortization. A higher EBITDA multiple indicates that investors are willing to pay more for EBITDA generated by your company.
EBITDA Multiple = Enterprise Value/EBITDA
2. Liquidity Metrics
Liquidity metrics are ratios used to assess a company’s ability to meet its short-term obligations. These metrics are crucial for understanding a company’s financial health and operational efficiency, particularly its capacity to pay off debts and handle unexpected expenses.
Quick Ratio
Measures your company’s ability to pay its short-term liabilities with its most liquid assets. A higher quick ratio indicates that your company has more than enough liquid assets to cover its short-term liabilities.
Quick Ratio = (Current Assets – Inventory)/Current Liabilities
Current Ratio
Measures your company’s ability to pay its short-term liabilities with its short-term assets. A higher current ratio indicates that your company has more current assets than current liabilities.
Current Ratio = Current Assets/Current Liabilities
3. Efficiency Metrics
Efficiency metrics are financial measures that evaluate how well a company uses its assets and liabilities to generate sales and maximize profits. They help assess a business’s performance and identify areas for improvement to enhance productivity and profitability.
Receivables Turnover
The metric shows how efficiently your company collects payments from customers. A higher receivables turnover ratio indicates that your company is collecting payments more quickly.
Receivables Turnover Ratio = Net Credit Sales/Average Account Receivables
Asset Turnover
The metric shows how efficiently your company is using its assets to generate revenue. A high asset turnover ratio indicates that your company is generating more revenue.
Asset Turnover Ratio = Net Sales/Average Total Assets
4. Debt Metrics
Debt metrics are indicators used to assess a company’s leverage, debt load, and ability to meet its debt obligations. These metrics provide insights into a company’s financial stability and risk profile, helping investors, analysts, and management evaluate its debt levels’ sustainability and capacity to handle debt.
Debt to EBITDA
Compares your company’s debt load to its earnings before interest, taxes, depreciation, and amortization (EBITDA). A lower debt to EBITDA ratio generally indicates that your company has less debt compared to its earnings.
Debt to EBITDA = Total Debt/EBITDA
Debt to Equity
Compare your company’s debt load to its shareholder equity. A lower debt to equity ratio indicates that your company has less debt relative to its equity.
Debt to Equity = Total Debt/Total Shareholder Equity
5. Profitability Metrics
Profitability metrics are indicators used to assess a company’s ability to generate profit relative to its revenue, assets, equity, and other financial metrics. These metrics provide insights into the efficiency and effectiveness of a company’s operations and its potential to generate earnings for shareholders.
Return on Equity (ROE)
The metric shows how efficiently your company generates profits from the money invested by shareholders. A higher ROE indicates that your company is generating more profits from shareholder equity.
Return on Equity = Net Income/Average Shareholder Equity
Return on Assets (ROA)
The metric shows how efficiently your company generates profits from its assets. A higher ROA indicates that your company is generating more profits from assets.
Return on Assets = Net Income/Average Total Asset
Fill in the values and get a detailed analysis of your company’s performance and position in the market.
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