Question

Please sort the following into factors most applicable for comparable company analysis and factors most applicable for precedent transaction analysis:

a. Comparable Company Analysis
b. Precedent Transaction Analysis

Answer 1

Answer:

Difficult to adjust for Intangibles - Precedent Transaction Analysis

Valuation Multiples reflect real M&A transactions - Precedent Transaction Analysis

Valuation Multiples reflects trading multiples on public markets - Comparable Company Analysis

Potentially reveals information about market demand for certain types of assets and industry trends - Comparable Company Analysis

May include special purchaser considerations such as Synergies. - Precedent Transaction Analysis.

Explanation:

Comparable company analysis is process of examining businesses that operates in same sector using valuation multiples. It helps business to find the analysis based on comparable features of business. Precedent transaction analysis is the process in which previous transactions are referred as sample for the new transactions analysis.

Answer 2

The factors that most applicable for comparable company analysis as well as factors most applicable for precedent transaction analysis can be sorted as;

• Difficult to adjust for Intangibles (Precedent Transaction Analysis)

• Valuation Multiples reflect real M&A transactions (Precedent Transaction Analysis)

• Valuation Multiples reflects trading multiples on public markets ( Comparable Company Analysis)

• Potentially reveals information about market demand for certain types of assets and industry trends ( Comparable Company Analysis)

• May include special purchaser considerations such as Synergies. (Precedent Transaction Analysis)

A comparable company analysis  can be regarded as process involving  evaluation of the the value of a company by the utilization of metrics of other businesses.

Precedent transaction analysis on the other hand can be regarded  as the valuation method which involves a process whereby  price is been paid as regards similar companies in the past is been used as value indicator.

Therefore, Difficult to adjust for Intangibles requires a precedent Transaction Analysis.

CHECK THE COMPLETE QUESTION BELOW;

Please sort the following into factors most applicable for comparable company analysis and factors most applicable for precedent transaction analysis:

a. Comparable Company Analysis

b. Precedent Transaction Analysis

Difficult to adjust for Intangibles -

Valuation Multiples reflect real M&A transactions

Valuation Multiples reflects trading multiples on public market

Potentially reveals information about market demand for certain types of assets and industry trends

May include special purchaser considerations such as Synergies. -

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