U.S. Valuation Guide 2023: An Essential Resource for Investors and Analysts

U.S. Valuation Guide 2023: An Essential Resource for Investors and Analysts

U.S. Valuation Guide 2023: An Essential Resource for Investors and Analysts

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  • On July 4, 2024
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By

Rajesh Khairajani
Partner - Valuation Services

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Welcome to the 2023 U.S. Valuation Guide, designed to provide crucial insights into valuations across various U.S. industries. Whether you’re an investor, analyst, or decision-maker, this guide will help you assess startups, evaluate mature corporations, and estimate the fair value of investments.

Comprehensive Industry Analysis

Our guide includes industry-level estimates for:

  • Cost of equity
  • Cost of debt
  • Weighted Average Cost of Capital (WACC)
  • Performance statistics
  • Valuation multiples
  • Levered and unlevered betas
  • Capital structure
  • Additional financial statistics

All analyses are based on data as of December 31, 2023, and focus on publicly held U.S. corporations listed on the NYSE or NASDAQ.

Methodology

Company Selection:

  1. Initial Evaluation: Top 750 companies on NYSE and NASDAQ based on market capitalization and a trading history of at least one year.
  2. Data Refinement: Final dataset of 424 companies after eliminating those with data deficiencies.
  3. Industry Classification: Companies classified into over 110 industries using the Global Industry Classification Standard (GICS).
  4. Industry Shortlisting: Analyzed for comparability and expertise, resulting in 29 industries.
  5. Financial Ratio Analysis: Evaluated for inconsistencies, providing averages, medians, and quartiles.

Statistical Adjustments:

  • Outlier Elimination: Data points beyond the 99th percentile excluded using confidence intervals.

Dual Interpretation Approach

This guide offers two ways of interpreting industry data:

  1. Comprehensive View: Examining all companies in an industry and their various statistical data points.
  2. Adjusted View: Adjusting for outliers to ensure a close set of statistical data points.

Users can choose the dataset most appropriate for their needs.

Key Metrics

The guide covers return ratios, debt ratios, activity ratios, multiples, liquidity ratios, capital expenditure, depreciation ratios, working capital ratios, and betas. These metrics help assess financial health, growth potential, and risk factors, offering a comprehensive understanding of industry positioning.

Practical Application

This guide is not a one-size-fits-all solution; it provides reference points to complement professional judgment and qualitative analysis.

Commitment to Excellence

With decades of global valuation experience, we ensure transparency and continuous improvement. Feedback is invaluable to us, so please reach out to [email protected].

Use this Valuation Guide to navigate valuation complexities, uncover hidden value, and make informed decisions.

Download PDF for detailed insight

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