Comparable Company Analysis

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A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company.

In short, we want to select companies, which present the same features as our target firm.

The objective, then, is to understand the competitive context of the organization we’re analyzing.

Joshua Rosenbaum and Joshua Pearl, authors of “Investment Banking,” offer us two main criteria to select our comparable companies:

- The business profile
- And the financial profile

These two profiles will help us find those companies that can be used as comparables for our financial analysis.
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