Hi I am preparing for some finance interviews and am trying to get familiar with the market approach. How do you pick multiples? Is it based on the company’s performance against peers? What if you are valuing a private company? Then how would you compare your performance against peers? Do you usually just pick the median or average?

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Can vary amongst firms and the situation. A general approach would be to look at the industry, region, size, etc. as your starting point and narrow down on both qualitative and quantitative metrics from there. This goes for both trading and transaction comps.
If looking at a private company, you would still look mostly at public company comps and try and aim for the target size, but can be more difficult to do. The mean/median component can vary on the firm, you would generally show both, but median is used most frequently from my experience since it removes impact from any outliers.

In a valuation you typically pick a range of multiples.

Given COVID is an external factor I’d assume the entire industry is affected ie multiples across the industry are down.

You might pick the lower range of the comps multiples but you would need to come up with a reason for doing so.

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