A highly interactive and resourceful platform that provides value for corporate finance.
CapIQ is a shortened abbreviation for S&P Capital IQ. It is a platform derived from market intelligence data designed by Standard & Poor's, also known as S&P. This platform is a highly interactive and resourceful construct that provides value for corporate finance.
This software was founded back in 1998 by Steve Turner, Randal Winn, and Neal Goldman. It began with the sole purpose of providing business analytics for the markets.
Five years later, in 2004, it was acquired by McGraw-Hill Financial for over $200 million and later rebranded to S&P Capital IQ in 2016.
Therefore, it is widely known as the research extension of S&P Global, providing market indices, cutting-edge research, and ratings. However, it is mainly used for financial modeling due to its prevalent involvement in investment banking, asset management, and equity research.
Through all the data, research, and news provided through its interface, S&P Capital IQ provides professionals with a plethora of information.
With said information, analysts can perform financial analysis to drive equity research and investment recommendations or help build a comparable company for mergers and acquisitions.
What is CapIQ used for
This platform's web portal provides overall market awareness due to its multi-faceted data provisions ranging from private equity funds to advisory firms. It accomplishes such a feat by collecting and analyzing billions of data points annually.
Capital IQ reports all this data in company profiles, economic statistics, and executive summaries as a trailblazing pioneer of financial research and services.
With access to over 150,000 companies worldwide, it can provide market snapshots for publicly-traded companies.
Moreover, this product provides up-to-date financial data, market performance comparisons, and insight for investment institutions such as hedge funds.
Additionally, this concept of arming users with input benefits college students, investors, and even institutional traders.
Thus, it is commonly used for financial modeling purposes, including but not limited to industry and company research, building Excel models, quantitative research, structure and updating slide decks, and even performing general analysis to find comparable companies.
S&P's primary offerings target the off-trading-floor market by providing financial intelligence using their specialized desktop solutions. These services enable users to parse relevant financial data for their research.
S&P Capital IQ provides an immense amount of assistance and desktop solutions, including:
- Data and Content
- Public and Private Company Information
- Market Data
- Portfolio Management and Risk Analytics
- Credit Analytics
- Alpha Factor Library
- Productivity and Workflow Solutions
- Excel Plug-in
These services enable the S&P platform to combine, analyze, and formulate insights from carving through substantial amounts of data which are then integrated into their various desktop solutions.
Furthermore, S&P's vast pool of data enables their service to provide broad and deep global coverage, which offers a wide array of market insights to aid their clients' growing analytical and operations requirements.
For additional reference, Fordham University's Industry Research Tutorial has been embedded.
Costs and Users
Although S&P Capital IQ has not outright placed its cost, industry averages place its subscription at around $30,000. Compared to its competitors, like Bloomberg, which have about 33% market share compared to S&P's 6%, their pricing varies per customer.
Based on their customers' needs and requested features, the pricing depends on the type of institution or firm, institution size, regional location, and other factors. For instance, it is typically expected for college students to receive access to an account as part of their tuition.
While having upwards of hundreds of thousands of subscribers, CapIQ is slightly less costly than some of its counterparts, causing them to be a popular choice for many investment banking students and users.
For instance, Tangify's research finds that although CapIQ's pricing is not published, data from a few of S&P's clients include that:
- A 25-user CPA firm paid $125,000 annually
- A 400-user Valuation Firm paid $600,000 per year
- A 4-user Private Equity firm paid $75,000 annually
- An 8-user CPA firm paid $63,000 per year
- A 5-user Investment Banking firm paid $55,000 annually
This shows the dispersity of S&P's service, as it can vary from $5,000 per user to over $18,000 per user.
An Inside Look into CapIQ
Being an international database covering over 99% of the global market capitalization, it enables users to access global financial data beneficial for investment bankers, portfolio managers, and analysts.
Once logged into your account, you will find access to public and private company data, merger and acquisition transactions, macroeconomic data, company news, transcripts, and commodities.
For example, the dashboard includes proprietary data and analysis from S&P, which breaks down into commentary, strategy, and insights.
The commentary and strategy come from bi-weekly S&P earnings reports and M&A and Equity Offerings market reports. Similarly, S&P insights provide different quantamental research posted every few months.
Moreover, the dashboard also contains drop-down menus to look at the market overview for the world, US, Europe, Asia, rates, currencies, and commodities. Additionally, with the update, S&P embeds external links to its M&A market analysis and company screening.
Within the M&A space, S&P shows recently announced M&A transactions within the last thirty days, the most significant M&A transactions from the previous twelve months, M&A transactions within sectors per the last two years, and transactions values by industry.
Considering this, the software has many pros and cons for specific demographics and purposes.
Benefits of using S&P Capital IQ
First, this software has numerous benefits, including its time efficiency, Excel plugin, modernized presentation feeds, global coverage, name recognition, equity research report access, and prevalence in financial modeling.
The Excel plugin data from their database goes directly into spreadsheets and formulas. This includes revenue, EBITDA (Earnings Before Interest Tax Depreciation and Amortization), share prices, EPS (Earnings Per Share), and data from the three financial statements.
Furthermore, similar to its Excel plugin, the time efficiency created for presentations is substantial due to Cap IQ's ability to automatically create up-to-date charts, tables, and graphs from its PowerPoint plugin.
Additionally, as aforementioned, due to the service's widespread use in financial modeling, the Excel plugin is heavily utilized as analysts can create more accurate economic models by integrating historical company information and equity forecasts.
Conversely, the drawbacks of this software include:
- A hefty subscription cost.
- An outdated user interface.
- Smaller company financials that do not have much data.
- A lack of closed-end fund data.
Moreover, here is an embedded example of performing a relative valuation while utilizing this software.
Suppose you are looking to get into Investment Banking or Private Equity. In that case, learning how to use the S&P Capital IQ software will benefit you and most likely become a significant factor in your life as you build your technical skills and approach to breaking into your career.
This service is best for prospective investment banking students since their potential employers will likely use a similar service for their operations. It sharpens their analytical thinking while allowing them to click back to audit the source data.
Moreover, with all the internal and external resources from the M&A market analysis to the company, transaction, and commodity screening software, S&P enables its users to develop problem-solving skill sets for their field.
Thus, this program is popular in investment banking as it is efficient, has cutting-edge data, and provides convenient Excel and PowerPoint plugins.
Everything You Need To Master Financial Statement Modeling
To Help You Thrive in the Most Prestigious Jobs on Wall Street.
Researched and authored by Shreyas John | LinkedIn
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