This banking industry comps template is used as a guideline to create a comparable companies universe for the banking industry. This template establishes a comps table for JPMorgan Chase & Co. Check out CFI's airline industry comps template to get a look at a different industry!

Comparable Company Analysis

Comparable company analysis ("comps") is a valuation method that looks at financial ratios from businesses in an industry. The intuition behind comps analysis is that if people will pay a certain amount for similar companies, they should be willing to pay that same amount for the company being valued. Contrasting with discounted cash flow (DCF) analysis, an intrinsic form of valuation, comps analysis is a relative form of valuation. Use this banking industry comps template to help you understand some of the processes of valuing a bank. Comps analysis is simpler than DCF analysis on a basic level. Unlike DCF analysis, comps analysis does not involve many assumptions. Conversely, DCF analysis uses many assumptions when forecasting, making the model more complex. As well, comps are more intuitive to understand. Comparing multiple things to discover the value of one is a common strategy in many situations. Therefore, comps tables help make valuation easier to understand. Hopefully, this banking industry comps template will help you understand valuation better.

Choosing Comparable Companies

An analyst must look for similar companies when choosing comparable companies for a comps table. There are several factors to look for when choosing a comparables universe. Although it is difficult to find companies that match in every aspect, it is still good to remember these factors. This banking industry comps template looks at the following factors:
  • Industry Classification
  • Size
  • Geography
  • Growth Rate
  • Profitability
  • Capital Structure
Since this template is specific to the banking industry, industry classification is easily matched. Size and geography are also usually easy variables to look for and match. However, growth rate, profitability, and capital structure require a more detailed look into the financials of companies. For the simplicity of this template, we prioritize size and geography as the matching factors. This template includes companies that show the following characteristics as well:
  • Similar size and geographical coverage
  • Similar size and different geographical coverage
  • Different size and similar geographical coverage
  • Companies with similar business models
CFI teaches advanced valuation skills in our Financial Modeling and Valuation Analyst® certification program. Take a look at our program and some of our free courses to learn all the skills you need to become a world-class financial analyst!
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