"Walk me through a comparable company analysis" is one of the most common valuation questions in analyst and associate interviews — and it's also one where candidates lose points not on the math, but on the judgment calls around it. Here's a framework for structuring your answer, plus a full worked example at the end.
Step 1: Explain how you'd pick the peer set — before touching any numbers
Interviewers want to hear that you'd screen for companies with a similar business model, similar growth and margin profile, and comparable size, before ever pulling a multiple. Naming criteria first signals that you understand comps is a judgment-driven exercise, not a spreadsheet lookup.
Step 2: Say out loud that you'd scrub each peer's EBITDA
Before computing any multiple, adjust each peer's reported EBITDA for one-time items — restructuring charges, litigation settlements, asset write-downs — so the multiple reflects normal, repeatable earnings. Interviewers specifically listen for whether you mention this unprompted, because skipping it is the single most common way candidates get the "right" formula but the wrong multiple.
Step 3: Compute the multiple, then talk about the spread — not just the number
EV divided by Adjusted EBITDA gives you a multiple per peer. A strong answer doesn't stop at the arithmetic: it addresses why the peer multiples aren't identical. If one peer's multiple is far outside the range of the rest — for example, because it's the subject of takeover speculation, as explored in Comparable Company Analysis — you should explain why it doesn't belong in your reference range, rather than quietly averaging it in.
Step 4: Use a median (or range), not a simple average
A simple average across all peers is exactly the calculation an outlier will distort. Using the median of the scrubbed, screened peer set — or better, presenting a range bounded by the low and high multiples — shows an interviewer you understand that a comps output is a defensible range, not a single precise number. This is the same judgment that shows up when comparing methods more broadly; see Three Valuation Methods for how comps, precedent transactions, and a DCF are meant to be triangulated rather than trusted individually.
Step 5: Bridge to a conclusion
Apply your reference multiple to the target's own Adjusted EBITDA to get an implied Enterprise Value, note it's a starting reference point (not a final answer), and connect it back to Enterprise Value and the equity value bridge if the question goes further.
See it worked end to end
For a full numerical example — five peers, one distorted by deal speculation, a scrubbed EBITDA calculation, and an implied Enterprise Value for the target — work through Comparable Company Analysis, which mirrors exactly the structure interviewers expect.