Comparable Company Analysis
Definition
A valuation methodology that estimates a company's value by reference to the valuations of similar companies, expressed as multiples of financial metrics such as revenue, annual recurring revenue, or earnings before interest, tax, depreciation, and amortisation, applied to the subject company's equivalent metrics. The peer set must be constructed using documented selection criteria applied before the multiples of candidate companies are examined.
Common Misapplication
The most common misapplication is selecting the peer set after observing the multiples of candidate companies, which introduces selection bias toward companies with high multiples and produces a peer set that is not representative of the market.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.3: Comparable Company Analysis.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Comparable Company Analysis. https://ffistandard.org/glossary/comparable-company-analysis/. 2026.