How do you compare the worth of companies within the same industry?

To compare companies, look closely at their finances. Here's what matters: 1) Income Statement Sales Growth: Are sales going up each year? Fast growth is good! Operating Margins: How much profit does the company keep after costs? Higher is better. Net Income: The final profit after all costs. Is this growing? 2) Balance Sheet Debt-to-Equity: How much borrowed money do they use? Lower is safer. Current Ratio: Can they pay short-term bills? A number above 1 is good. 3) Cash Flow Statement Operating Cash Flow: Money from the main business. Positive and growing is vital. Free Cash Flow: Money left for investment or paying investors. More is better. The company that excels financially and has a bright future is likely the most valuable!

In my opinion Financial statements are required to compare with in same Industry how each one of them are performing. Each organisation with in same industry will have different options & approach to become industry leader. Every one will have different strategies to capture the market share. Only Financial statements will provide insights how successful they are in implementing their strategies. Key ratios will be compared to get Who is doing better

Compare companies within the same industry by analyzing financial metrics (e.g., revenue, profit margins), market share, growth potential, competitive advantage, management team, brand value, and industry trends. Use valuation methods like price-to-earnings ratio, discounted cash flow analysis, and comparable company analysis to determine relative worth.

Conduct thorough financial analysis to assess key metrics such as revenue, profitability, and cash flow. Compare financial statements, balance sheets, and income statements to gauge the financial health and performance of companies within the same industry.

Market capitalization ("market cap") is how much a company is worth based on its total stock value. It's a quick way to see a company's size relative to competitors. * Usefulness:?Compares companies in the same industry. A rising market cap might mean good growth. * Not everything:?Market cap ignores debt, cash, and other assets. Key points: * Higher market cap = investors think the company is worth more. * Two companies with the same market cap can have very different financial health. * A smaller company might have a brighter future than a larger one. Bottom line: Market cap is helpful, but not the whole picture. To judge, also consider: * Debt levels * Profitability * Growth potential * How it stacks up against competitors

Evaluate market capitalization to determine the total value of a company's outstanding shares. Compare market capitalization among companies in the same industry to gauge their relative size and market value.

Consider the Price-to-Earnings (P/E) ratio as a measure of valuation. Calculate the ratio by dividing the current market price per share by the earnings per share. Compare P/E ratios across companies to assess their relative valuation and investor sentiment.

To the most fair valuation, it is necessary consider some indicators that do not translate the reality of growth potencial. Firstly, if the company is in Growth Investing vision, such as neobanks and fintechs, the executives will burning capital and registering losses in the early stage to gain market share, because of this, if you see only profit, you can creating bias. Secondly, pay attention to the Adjust Ebitda indicator, some startups use tax benefits and create a fake profit, this can disturb the measures of NPV or Payback. Thirdly, companies with growth potencial have historial performances on increase, in least double-digits percentages in average in customers bases, sales in the same store or products sales addiction.

Assess growth potential by analyzing historical growth rates, projected earnings, and expansion strategies. Look for indicators such as revenue growth, market share gains, and investment in research and development to evaluate companies' growth prospects within the industry.

Evaluate sustainability and business value. There are the various economic indices in the developed and developing worlds. Ensure to compare equivalent metrics.

Evaluate competitive position based on factors such as market share, product differentiation, and brand strength. Analyze competitive advantages, market positioning, and customer loyalty to assess how companies within the industry stack up against each other.

One can also consider Innovation Premium. Innovation premium highlights the market's perception of a company's future growth potential driven by its capacity to innovate. By comparing a company's current market capitalization to the net present value (NPV) of its existing business, the innovation premium reveals the extra value investors place on companies with a strong track record of introducing new products, services, or market approaches. This metric enables investors to differentiate between companies within the same industry based on their anticipated ability to generate future earnings through innovation.

I would probably hire professional valuator(s) to do a proper 3rd-party survey of the fair market value as well as the net worth for a company from a management perspective. This report will be more objective, especially involving in M&A.

In addition to the mentioned factors, consider qualitative aspects such as management quality, corporate governance, and industry trends. Conduct industry benchmarking and seek expert opinions to gain deeper insights into the comparative worth of companies within the same industry.