Benchmark Analysis
Benchmark Analysis is an indispensable part of Transfer Pricing Documentation, which contains the full derivation of the calculations, recommended for Tax Advisors and Financial Experts. The purpose of the benchmarking study is to present a consolidated analysis of Companies' pricing and to demonstrate the market value of the associated prices during their related business transactions.
Given that company profitability information is not available for third parties, M&A World uses the financial data of companies that are similar to the transaction under investigation and therefore have comparable activities to determine the normal market price range.
On the basis of generally accepted practice, profitability is considered to be of a normal market nature if it falls between the lower and upper quartiles of the normal market price range on the basis of financial information of comparable businesses.