Which method assesses company value based on similar publicly traded companies?

The method that assesses company value based on similar publicly traded companies is Comparable Company Analysis. This approach involves evaluating a company by comparing it to other businesses in the same industry that share similar characteristics, such as size, growth rate, and market focus. The idea is to derive a valuation multiple (like price-to-earnings or enterprise value-to-EBITDA ratios) from the selected peer companies and apply it to the company being valued.

This technique is particularly useful because it provides a market-driven perspective on value, reflecting how investors currently value similar companies. It is often used in investment banking, equity research, and corporate finance as a reliable way to obtain an estimate of a company's worth based on the real-world valuation metrics of its peers.

In contrast, the other options listed use different methodologies. Discounted Cash Flow Analysis focuses on the company's individual cash flows projected into the future and discounts them back to present value, while Liquidation Analysis looks at the company's net asset value if it were to be sold off. Relative Valuation is broader and includes various strategies to compare companies, but when specifically referencing similar publicly traded companies, Comparable Company Analysis is the most precise method.