“Read the instructions” to transactional databases is the advice Jim Hitchner (Financial Valuation Advisors) stressed several times in the February 2022 issue of Hardball With Hitchner. He gives a primer on three databases—DealStats, BIZCOMPS, and ValuSource Market Comps—analysts typically use for the guideline company transactions method. All three of these databases include instructions and user’s guides that explain how to use their data—and each of them are different, he points out. He also provides a nice checklist that points out what he sees as some mistakes that can be made when applying the data, such as: 

• Using transactions that were in a different economic or industry cycle;
  
• Averaging widely dispersed multiples;
  
• Not knowing whether the transaction price includes a strategic premium;
  
• Finding only one year of financial information available; and 
  
• Not knowing or guessing at what assets and liabilities were transferred.

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