Capital IQ

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on July 12, 2023

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What Is Capital IQ?

Capital IQ, often referred to as "CapIQ," is a comprehensive financial data and analytics platform. It is owned by S&P Global, a leading provider of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide.

Capital IQ provides a suite of services that includes data on both private and public companies, investment firms, capital transactions, and people.

It's widely used in various areas of the financial industry, including investment banking, equity research, asset management, and more.

Its extensive data coverage, analytical tools, and Excel plug-in make it a versatile platform for financial analysis and research.

The platform offers detailed financial information, comprehensive Mergers and Acquisitions (M&A) transaction data, credit ratings, fixed-income data, macroeconomic data, and much more.

This helps users to conduct in-depth financial analysis, company comparison, financial modeling, and valuation work. It's also used extensively for financial research in academic settings.

Key Features of Capital IQ

Company and Industry Analysis

Capital IQ allows users to conduct in-depth company and industry analyses. This feature provides information on company financials, key personnel, strategic initiatives, recent news, and more. It also offers data on industry trends, market share, competitive landscape, and key performance metrics.

M&A and Private Equity Database

Capital IQ hosts a vast database of M&A transactions and private equity deals. This feature provides details of the deal structure, value, advisors, and more. It is particularly valuable for investment banking analysts and associates, who often use it for deal sourcing and comparable analysis.

Fixed Income Data

Fixed income investors can benefit from Capital IQ's detailed bond data. This includes information about issuers, yield, maturity, covenants, and ratings, making it a valuable tool for credit analysis and risk management.

News, Events, and Filings

Capital IQ aggregates financial news, events, and regulatory filings in real-time. This keeps users informed about the latest happenings and developments in companies and industries of interest.

Peer Analysis and Key Developments

Capital IQ's peer analysis feature allows users to compare a company against its competitors based on various financial metrics. Furthermore, the key developments section tracks important company-specific events, such as leadership changes, product launches, or regulatory issues.

Key Features of Capital IQ

Detailed Exploration of Capital IQ Functions

Financial Statement Analysis

Capital IQ provides tools for detailed financial statement analysis. Users can extract company financials, perform ratio analysis, and export data to Excel for further manipulation. This feature is extensively used by equity researchers and financial analysts.

Equity Research and Valuation

The platform allows users to conduct equity research and valuation. Users can access consensus analyst estimates, historical share price data, and valuation multiples. The platform also provides tools to build Discounted Cash Flow (DCF) models and perform sensitivity analysis.

Fixed Income and Credit Analysis

For fixed-income investors, Capital IQ provides a suite of credit analysis tools. Users can access detailed bond data, assess a company's creditworthiness, and evaluate credit risk. This functionality is critical for risk management and investment decision-making.

Portfolio Analysis and Management

Capital IQ offers tools for portfolio analysis and management. Users can track portfolio performance, conduct risk analysis, and generate reports. This feature is particularly useful for asset managers and investment advisors.

Capital IQ's Excel Plug-in

One of the most powerful features of Capital IQ is its Excel plug-in. This tool allows users to pull data directly into Excel, automate data updates, and build custom financial models. This greatly enhances efficiency and accuracy in financial analysis.

Detailed Exploration of Capital IQ Functions

Using Capital IQ for Research

Capital IQ is not just a tool for finance professionals; it also supports academic research. The vast array of financial data available on the platform can be harnessed to test financial theories, conduct empirical studies, and develop new investment strategies.

For example, a research study may use Capital IQ to gather data on firm-level financial characteristics to test the predictive power of certain financial ratios on future stock returns.

Another study might use the M&A database to analyze the determinants of acquisition success or failure.

Advantages and Limitations of Capital IQ

Advantages Over Other Databases

Capital IQ stands out for its comprehensive coverage of both public and private companies, its user-friendly interface, and the quality and depth of its data. It's M&A and private equity database is particularly robust, making it a valuable tool for investment banking professionals.

Additionally, the Capital IQ Excel plug-in greatly enhances efficiency by allowing users to pull data directly into Excel.

Limitations and Challenges

Despite its many strengths, Capital IQ also has limitations. The platform can be expensive, potentially limiting access for smaller firms or individual users.

While Capital IQ's data coverage is extensive, it may not be as deep or as timely for smaller or more obscure companies. Moreover, like any database, Capital IQ is not immune to errors or omissions in its data.

Advantages and Limitations of Capital IQ

Conclusion

Capital IQ, a product of S&P Global, is a comprehensive financial data and analytics platform providing in-depth data on public and private companies, investment firms, capital transactions, and individuals.

Its key features, including detailed financial information, M&A transaction data, fixed income data, and its versatile Excel plug-in, enable users to perform extensive financial analysis and research.

While it offers numerous advantages, like comprehensive data coverage, user-friendly interface, and robust analytical tools, it is important to acknowledge its limitations as well. Capital IQ can be costly, potentially restricting access for smaller firms or individual users.

Moreover, the data coverage might not be as deep or timely for less prominent companies.

Despite these limitations, the immense benefits of Capital IQ solidify its position as an indispensable tool in the finance industry.

Capital IQ FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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