Company Report Format
Purpose of this report: (Why prepare Company report?)
Arguably the most popular framework of analysing a company is the
Economic - Industry - Company framework (EIC Framework). It is a
top-down approach and starts with scanning the economic
environment of the country. Next, we scan the industry in which the
company operates. Finally, the health of the company is gauged.
Aim of this report is to record the findings of the third step.
Company Analysis is undertaken with the purpose of developing a
view of the future performance of the company. It assesses the
future profitability of the company after scanning the environment in
which it operates. The future performance of the company is gauged
both on qualitative and quantitative factors.
Company Analysis
Following are the sections of the report:
1. Executive Summary
o This section captures the essence of the report and
should be worded so as to induce interest in the readers.
2. Introduction to the Company
o Year of Establishment
o Size of the company in terms of Revenue and Net Profit
o Key Personnel
o Industry it operates in
3. Business Model
This section primarily addresses the following question
o What does the company do?
o What makes it different from others?
4. Product Portfolio
o The section entails the product and service portfolio of
the company and spells out the key focus area of the
company
5. Management Profile
o The section analyses the strength of team that conceives
and executes the strategy of the company. The
accomplishment of the company to a great extent is
hinged on the vision of the management team and their
ability to execute it.
6. Revenue Analysis
o This section aims to analyse the price, volume, and price
elasticity of the product.
7. Cost Structure Analysis:
o This section aims to analyse the major cost drivers,
proportion of variable to fixed cost. It may also capture
the efforts of the company in terms of cost
rationalisation/reduction. A detailed common size
analysis of the statement of profit and loss may be carried
out here so as to get an understanding of the cost
structure.
8. Profitability Analysis:
o In this section we examine the health of the company by
analysing the various profit measures of the companies.
Profit margins and Return on Equity may be used to
analyse the profitability of the company. Du Pont Analysis
may be used to understand the factors impacting
profitability.
9. Liquidity Analysis:
o The aim of this section is to gauge the liquidity position of
the company and comment on the factors that impact the
liquidity position of the company. Cash Conversion cycle
analysis and Working Capital Analysis may be caried out
here.
10.Solvency Analysis:
o This section analyses the ability of the company to pay off
its debts in the long run. Debt to Equity Ratio and Interest
Coverage Ratio may be calculated.
11.CapEx analysis
o The section analyses the long-term investments of the
company. The quality of assets may be determined by
using ratios such as Return on Asset and Asset Turnover
ratio.
12.Competitive Advantage
o The competitive advantage of a company is what
distinguishes the company from its competitors. Hence, it
is important to analyse the company vis a vis peers in the
industry. The same may be analysed using the SWOT
framework. Ratios may be compared with the industry
averages to help determine the competitive advantage.
13. Stakeholders Analysis
o This section aims at capturing the stakeholders analysis
vis a vis customers, suppliers, employees, lenders, equity
investors and environmental protectionist groups.
14.Best Practices
o This section entails the best practices that the company
follows which has yielded results.
