Peer Group

A peer group is a group of companies that are similar in size, industry, and other characteristics. Peer groups are often used for comparison purposes when evaluating a company's performance.

There are a few different ways to identify peer groups. One common method is to use the Standard Industrial Classification (SIC) code. The SIC code is a system that classifies businesses into different industries. By using the SIC code, you can identify companies that are in the same industry as your company.

Another method for identifying peer groups is to use the Global Industry Classification Standard (GICS). The GICS is a system that classifies businesses into different sectors, industries, and sub-industries. By using the GICS, you can identify companies that are in the same sector or industry as your company.

Once you have identified a group of peer companies, you can compare your company's performance to theirs. This can help you to identify areas where your company is doing well and areas where it could improve.

Peer groups can also be used to benchmark your company's performance. Benchmarking is the process of comparing your company's performance to the performance of other companies in your industry. Benchmarking can help you to identify areas where your company is doing well and areas where it could improve.

Peer groups can be a valuable tool for evaluating and benchmarking your company's performance. By using peer groups, you can get a better understanding of how your company is doing compared to other companies in your industry.