Chapter 6: Company Analysis—Past and Present

In this section

• Elements of a Company Research Report
  Elements of a Company Research Report (CFA Level 1): Executive Summary, Crafting a Crisp Investment Thesis, and Market Position and Competition. Key definitions, formulas, and exam tips.
• Evaluating Revenue Drivers, Profitability, and Growth Trends
  Evaluating Revenue Drivers, Profitability, and Growth Trends (CFA Level 1): Understanding Key Revenue Drivers, Volume Growth and Market Demand, and Diagram: Factors Influencing Volume Growth. Key definitions, formulas, and exam tips.
• Assessing Operating Efficiency and Working Capital
  Assessing Operating Efficiency and Working Capital (CFA Level 1): Understanding Operating Efficiency, Cash Conversion Cycle (CCC), and Why It Matters for Equity Investors. Key definitions, formulas, and exam tips.
• Role of Corporate Governance in Equity Analysis
  Role of Corporate Governance in Equity Analysis (CFA Level 1): Key Components of Governance Structures, Board Composition and Director Independence, and Committee Structure and Oversight. Key definitions, formulas, and exam tips.
• Impact of Mergers and Acquisitions on Equity Analysis
  Impact of Mergers and Acquisitions on Equity Analysis (CFA Level 1): Strategic Rationale Behind M&A, Accretive vs. Dilutive Deals, and Financing Structure and Leverage. Key definitions, formulas, and exam tips.
• Differences in Segment Reporting and Implications for Analysis
  Differences in Segment Reporting and Implications for Analysis (CFA Level 1): Importance of Segment Reporting, Key Financial Elements in Segment Disclosures, and Identifying Cross-Subsidization. Key definitions, formulas, and exam tips.
• Assessing Management Quality and Strategy Execution
  Assessing Management Quality and Strategy Execution (CFA Level 1): Importance of Management Quality, Background Checks on Senior Leadership, and Personal Tidbit: The Not-So-Transparent CFO. Key definitions, formulas, and exam tips.
• Activist Shareholders and Proxy Contests
  Activist Shareholders and Proxy Contests (CFA Level 1): Who Are Activist Shareholders?, Key Motivations for Activism, and Proxy Contests: The Battle for Votes. Key definitions, formulas, and exam tips.
• Corporate Life Cycle Analysis
  Corporate Life Cycle Analysis (CFA Level 1): Key Phases of the Corporate Life Cycle, Growth Phase, and Maturity Phase. Key definitions, formulas, and exam tips.
• Analyzing Corporate Culture Alignment with Strategic Goals
  Analyzing Corporate Culture Alignment with Strategic Goals (CFA Level 1): Defining Corporate Culture, Connecting Culture to Strategy, and Practical Indicators: Gauging the “Real” Culture. Key definitions, formulas, and exam tips.