 # Compa Ratio: Definition, Formula, & Examples Written by
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## How To Calculate Compa Ratio

Have you ever run across a situation where you’ve wondered – what kind of antenna would work best with my existing antenna?” When in doubt, you can use this simple formula to calculate your compa ratio.

So what is compa ratio? Simply put, it’s the inverse of your antenna’s bandwidth. The bandwidth of an antenna is a basic measure of its abilities – its ability to receive a wide range of frequencies. If you know the bandwidth of your existing antenna, you can calculate the compa ratio (your antenna’s counterpart or complimentary antenna) you need to choose.

Check out some examples below.

Example 1: No. 2 (wideband) when used with:

No. 1 (narrowband) = compa = -1; that is, signal strength increases by -1 dB.

Example 2: No. 2 (wideband) when used with:

No. 1 (narrowband) = compa = 0; that is, signal strength remains the same.

### What Does Your Compa Ratio Mean?

Compa Ratio (aka China Ratio) is a simple and effective method for finding out if a company is undervalued.

It’s generally a poorer cousin of the Enterprise Multiple, which requires a lot of painstaking analysis to derive the value, and it works even on companies that do not sell as much as their peers.

However, the Enterprise Multiple will work for companies that are growing just as well as those that are not (in this case, the Enterprise Multiple will be greater), so if the Enterprise Multiples are also in range, the Entry Price is much more accurate.

With Compa Ratio, you take the last year’s revenue, divide it by the average of the last three years’ revenue. If the result is over 4, then the company is expensive. If it’s under 4, then it’s cheap.

#### Summary

During the Internet bubble, you could see Compa Ratios of over 8. Those companies were generally expensive.

For a range of values from 4 to 8, look here:

For a range of values from 2 to 4, look here:

For a range of values of 1 to 2, look here:

You could also introduce a multiplier into your calculations to reflect the growth prospects of the company.

## Compa Ratio Example

With reference to a formula or a method, compa ratio is the ratio of conversion. Basically, compa ratio is the ratio of conversion of theoretical units of measurement of two sample drawn data.

Formula calculating compa ratio is as follows :-

= Compa Ratio : 1.000 : 1

#### Compa Ratio = Explanation / Real Number

Example 1: Consider P and Q are two samples where sample P got 50% result valid while Q got 80% valid. Compa ratio = Expl. / Real number

Compa ratio = 50% / 80% = 0.5 : 1

Example 2: Considering P and Q are two samples where sample P got 60% result valid while Q got 80% invalid. Compa ratio = Expl. / Real number

Compa ratio = 60% / 80% = 0.6 : 1

Why Compa Ratio:

Compa ratio helps in converting the actual number of data into a percentage.

It can be calculated using formula as shown above.

It helps in understanding the sample variance of each data.

It provides an example of how you may calculate confidence interval.

Compa ratio helps in understanding the sample size of each sample.

It helps in comparing the sample variance and average of two samples.

## How to Get Market Comparison Salaries for Your Compa Ratio

Compa Ratio is a competitive analytical method developed by Joel Schwartz and Steven Stern. Compa Ratio can be a great tool for business, but it is also a great tool for projecting salaries for potential employees. As the name implies, Compa Ratio compares the salaries employees at competing companies are getting.

Compa Ratio is most often used to compare the salaries of people with similar skills in varying industries. With one person in charge of creating the compa ratio, it’s easy to find this comparison salary data for a variety of fields.

In addition to helping employees find competitive salaries, Compa Ratio also can help provide valuable insights on a company’s labor costs, and is an excellent tool to use with other salary surveys.

Essentially, the process of creating a compa ratio consists of these steps:

First, find the most highly paid employees in the industry and put their salaries into a spreadsheet.

Then, find the next most highly paid employee and compare that to the previous one. Repeat the process until the top five most highly paid are compared.

Next, find the next five highest paid employees and so on, until the salary information for the remaining 99 employees is ranked.

Finally, create a table that lists all 100 employees and lists the five highest qualified employees and ranks their salaries against each other.

## How To Use Compa Ratios

Compa ratios are a critical part of modern statistical analysis. You’ve probably heard this term before (compare ratios) but are still not sure what they are or how to use them in your business. Understanding compa ratios will help you make better business decisions, so it’s worth it to take the time to learn about them. Just like regular businesses, you can use compa ratios in your organization for advertising, marketing, pricing, sales forecasting, and a lot more!

Compa Ratios are just one type of ratio that compares orders. Other ratios might include unit sales ratios, product or customer volume ratios, and even time-based ratios. Compa ratios are just one way to compare orders. Their main purpose is to compare a customer’s order to an order coming from a competitor.

### Factors That Affect Compa Ratio

Comparable sales depends on the performance of the shops that you are comparing, meaning that the performance of the direct competitor is very important in the determination of this ratio. In fact, the compa ratio is largely a function of the items a particular shop is able to sell on a daily basis and so the nature of their business will have a considerable impact on the calculation.

For instance, a clothing store will tend to sell a higher proportion of lower value articles of clothing than a selling a high value product. Therefore, a shop which often deals in a lower value product will, in comparison to a shop selling a higher value product, sell numerous customer per day. On the other hand, if the shop is selling a higher value product, they will usually not be able to sell each and every customer the product they want. So, it is possible that the business that sells a higher value product can sell more customers per day. Hence, it is essential to determine what is in stock at a given point of time and what is not, and to discount the former for reasons of obsolescence.

The other factor that has an influence is the market which both stores and customers are operating in. Market conditions such such as a high level of unemployment and an increased awareness of the value of goods will drive down prices causing the compa ratio to drop.

## Alternatives to Compa Ratio: Other Salary Measures

Compa ratio is a popular, very simple formula for calculating salary increases. This article gives a quick overview of compa ratio and some of its formulas, then looks at other salary measures that could be useful for employers.

Compa ratio: This formula compares an employee’s salary to the median salary, to calculate how generous a salary increase is. For example, if an employee’s salary is 70 percent of the median, the employee is being paid 20 percent over the median, that is, 1.2 – 1, which is the compa ratio formula in Excel, the example below explains.

### Range Penetration

The compa ratio is a simple mathematical formula used for turning potential customers into actual customers. And just like any math equation, there are strict technical rules to this equation.

The compa ratio is expressed as a ratio of the potential customer to the actual customer. It is an important marketing tool mainly used by sales representatives to determine how much emphasis they should place on a potential customer or a current customer.

The formula for compa ratio is expressed as follows:

A potential customer who is more likely to become a customer than an existing customer is called a compa.

The compa ratio is determined by dividing the compas by the actual customers.

And the formula for compa ratio is as follows:

In the above formula, C is the total number of potential customers or compas.

U is the total number of actual customers.

V is the potential to become customers of customers.

In most cases, the term client refers to a compas rather than an actual customer.

A compa ratio of 100% means that all compas have already become actual customers.

If a compas represents a potential customer, and the compas is more likely to become customers than actual customers, then the compa ratio will be higher than 1.

### Compensation / Revenue Percent

The concept of a company’s net profit margin is very important to both companies, investors, and economists. If you haven’t already come across it, the net profit margin is defined as “Net income … ‬ Commission [P/S Profit ‬ Gross Margin] ‬ Operating Expense ‬ Miscellaneous Expense ‬ ‬ Interest Expense ‬ Taxes ‬ Earned Equity ‬ Preferred Dividends ‬ Earned Generated Revenue ‬ Non-Investment Revenue ‬ Extraordinary Items ‬ Ending Equity ‬ Beginning Equity ‬ Net Income””

## Bottom Line: Compa Ratio

Compa Ratio is a measure of the two competing companies’ market shares.

#### Methodology

Compa Ratio is a ratio of two companies’ market shares that is often used to measure –competition”. So it’s pretty straightforward. However, one can actually arrive at that figure with a variety of methods and formulas. In the end, they come up with the same results.

#### Compa Ratio Formula

1:n

N is the total number of brands that are being compared.

#### Example

Two companies are in the market for the same product. The first one has a 45% market share and the second one has a 35% market share.

Using the formula, we can calculate the Compa Ratio:

Compa Ratio = 1:45

So that business is more than 10% larger than the second business.

#### The Formula

Compa Ratio is just an average of the competition’s market shares. If we take one representative business from the competition and divide it by the number of competitors, we arrive at the Compa Ratio. So to get the Compa Ratio, we: