Comparables Analysis

Anotações:

• In-depth study the targets

1. Business Profile
   1. Sector
   2. Products and Services
   3. Customers and end market
   4. Distribution Channels
   5. Geography
2. Financial Profile

1. SEC Filings
   1. 10-K

      Anotações:

      • Annual report
   2. 10-Q

      Anotações:

      • Quarterly report
   3. 8-K

      Anotações:

      • current report, report the occurrence of material corporate event/ triggering event
   4. Proxy Statement

      Anotações:

      • material sent to shareholder prior to shareholder meeting/ informing matters that will be discuss in the meeting.
2. Equity search
   1. Research Report

      Anotações:

      • Provide estimate of future performance and forward looking multiples. 
   2. Consensus Research Estimate
3. Press Release and News

1. Size
   1. Equity value = fully diluted shares x price
      1. How to calculate fully diluted shares
         1. Treasury Stock Method assumptions

            Anotações:

            • assumes that all tranches of in-the-money options and warrants are exercised at their weighted average strike price with the resulting option proceeds used to repurchase outstanding shares of stock at the company's current share price.
   2. Key Financial Data
      1. Sales
      2. Gross Profit
      3. EBITDA
      4. EBIT
      5. Net Income
2. Profitability
   1. Gross Profit Margin = (sales - COGS)/ sales
   2. EBITDA margin = (EBITDA/sales)
   3. EBIT margin = (EBIT/sales)
   4. Net Income margin
3. Growth Profile
4. Credit Profile
   1. Credit Rating
   2. LTM
   3. Scrubbing/ sanitizing = adjust for non-recurring items
   4. Adjust for recent events
5. Calculating multiple
   1. Equity Value Multipples
   2. Enterprise Value multiples