Key takeaways
– S&P Capital IQ (often called Capital IQ) is S&P Global’s research and data platform for financial markets, used by banks, asset managers, corporate finance teams, private equity firms, universities and other professionals.
– The platform aggregates company profiles, financials, analyst research and market data for tens of thousands of public and millions of private companies, and delivers tools for screening, modeling and portfolio analysis.
– Major components include Compustat (historical and standardized financials), Xpressfeed (data-delivery/API/formatting) and Money Market Directories (prospecting for institutional funders).
– Typical user workflows: screen securities, extract time-series financials, build ratios in Excel or the web app, and run backtests or peer comparisons.
What S&P Capital IQ is (short definition)
S&P Capital IQ is a commercial financial data and analytics service operated by S&P Global. It combines raw market data, company filings and proprietary research into searchable databases and software tools that users license for research, valuation, portfolio monitoring and business development.
Why professionals use it
– Breadth: coverage of tens of thousands of public companies and millions of private firms, plus funds and other instruments.
– Depth: standardized historical financial statements, analyst reports, ownership and transaction data.
– Delivery: web interface, Excel plug‑in, and data feeds/APIs for integration with internal systems.
How S&P Capital IQ works (simple overview)
1. Data collection: the service ingests filings, news, market prices and third‑party sources.
2. Standardization: raw inputs are mapped into consistent line items (so you can compare firms across jurisdictions).
3. Distribution: clients access the data via a web portal, Excel add-in, or direct data feed (Xpressfeed).
4. Tools: the platform provides screening filters, peer group builders, valuation templates, portfolio analytics and backtesting features.
Core products and what they do
– Compustat: a historical financials database that standardizes balance sheet, income statement and cash flow line items to support time-series and cross‑company analysis.
– Xpressfeed: the formatting/delivery mechanism (API/data feed) that pushes Compustat and other datasets into client systems or custom models.
– Money Market Directories (MMD): a prospecting and relationship database focused on institutional funders such as foundations, endowments and grantmakers.
– Additional components: real‑time price data, analyst reports, ownership registries, and screening/backtesting modules.
Common terms (quick definitions)
– Screening: filtering a universe of securities using rules (for example, market cap > $1B and EV/EBITDA $500M and positive EBITDA.
3. Download standardized financial series (income statement, balance sheet) for the selected firms.
4. Build peer group metrics and compute ratios (e.g., EV/EBITDA) in the sheet or using the platform’s template.
5. Save the peer set, export results, and conduct further valuation or backtesting.
Worked numeric example — computing EV/EBITDA
Assumptions (example company data pulled from Capital IQ):
– Market capitalization = $5,000 million
– Total debt (short‑ and long‑term
and long‑term) = $1,200 million
– Cash & equivalents = $300 million
– Minority interest = $0 million
– Preferred stock = $0 million
– EBITDA (last‑twelve‑months, LTM) = $600 million
Step‑by‑step calculation
1. Compute enterprise value (EV). Formula:
EV = Market capitalization + Total debt + Minority interest + Preferred stock − Cash & equivalents
Plugging the numbers:
EV = 5,000 + 1,200 + 0 + 0 − 300 = $5,900 million
2. Compute EV/EBITDA (leverage/valuation multiple). Formula:
EV/EBITDA = EV / EBITDA
Plugging the numbers:
EV/EBITDA = 5,900 / 600 = 9.83x
Interpretation (brief)
– A 9.83x EV/EBITDA means investors are valuing the company at roughly 9.8 times its trailing EBITDA. This is a valuation multiple used to compare firms with different capital structures because EV includes debt and subtracts cash (unlike market cap).
– Use the multiple chiefly to compare to: (a) industry peers, (b) historical multiples for the same firm, or (c) transaction multiples in comparable M&A deals.
– Higher multiples may indicate faster growth expectations, higher profitability, or overvaluation; lower multiples can indicate slower growth, higher risk, or undervaluation. Always compare within sector and adjust for differences in accounting and capital intensity.
Quick checklist before you report or use EV/EBITDA from Capital IQ
– Date alignment: ensure market cap (share price × shares outstanding) and debt/cash figures are as of the same date (or use end‑of‑period snapshots).
– EBITDA definition: confirm whether the EBITDA field is reported, adjusted, or normalized (removing one‑offs). Decide whether to use trailing‑12‑months (LTM) or forward (consensus) EBITDA.
– Debt treatment: check if debt includes capitalized lease liabilities, pension deficits, or off‑balance‑sheet items; Capital IQ may have multiple debt-related fields.
– Cash treatment: decide whether to exclude restricted cash or short‑term investments; use consistent definitions across comparables.
– Currency and units: convert all items to the same currency and units (e.g., millions USD).
– Share count timing: if market cap uses price at a specific date, use the diluted shares outstanding as of that same date.
– Document adjustments: keep a short note of any manual adjustments (non‑recurring items, fiscal year alignments, accounting differences).
Common adjustments and caveats
– Lease capitalization (ASC 842 / IFRS 16): operating leases are generally capitalized on the balance sheet under current standards, but historical data providers may still report adjusted measures. Verify which treatment Capital IQ uses for the debt or lease fields you pull.
– Non‑GAAP EBITDA variants: providers may supply multiple EBITDA fields (reported EBITDA, adjusted EBITDA, EBITDA ex‑restructuring, etc.). Be explicit which one you use.
– Timing mismatches: market prices move intraday; if you use a historical price, note the timestamp. Similarly, financial statements are point‑in‑time.
– Cross‑country accounting differences: comparable firms in different jurisdictions may report EBITDA differently; apply conversion rules where necessary.
– Small sample sizes: when building peer groups, avoid relying on a single multiple; use medians and interquartile ranges to mitigate outliers.
Practical workflow in Capital IQ (short)
1. Use the screener to select peers by industry, geography, and size.
2. Pull standardized fields: Market Cap, Total Debt, Cash & equivalents, Minority interest, Preferred stock, and the EBITDA series you want (LTM or forward).