What do you mean by valuation comparison?

Valuation comparison method is a common method in enterprise evaluation. By comparing enterprises in the same industry, the same scale and the same region, the value of the inspected enterprises can be estimated. In practice, we can use this method to evaluate the equity value, property value or intellectual property value of an enterprise.

The advantage of valuation comparison method is that it is easy to understand and operate, and it also has high accuracy and credibility. When we need to invest, merge or acquire an enterprise, we can use this method to judge whether its value is reasonable and gain benefits from it.

Of course, the valuation comparison method also has its own limitations. For example, only relying on the valuation of enterprises in the same industry and scale can not fully consider the particularity of the inspected enterprises, and it needs to be comprehensively evaluated in combination with other valuation methods. In a word, valuation comparison method is a classic enterprise valuation method, which can provide us with a lot of valuable information and data.