Company analysis

1. Topic:
Company Analysis
Presented to: Sir Rizwan Hamid
Presented by: Mateen Altaf
Class: MBA (B&F) 6th semester
Subject: Investment & Securities Management
(8545)
mataltaf@hotmail.com
Allama Iqbal Open
University, Islamabad

2. Acknowledgment
First of all thanks to ALLAH, Who is most beneficent & the
most merciful, Whose blessings are abundant & favors are
unlimited.
It’s my pleasure to acknowledge the guidance and support of
my subject teacher Mr. “Rizwan Hamid” for her endless
guidance.

3. Introduction
Company analysis is a process carried out by investors
to evaluate securities, collecting info related to the
company’s profile, products and services as well as
profitability.
During the process of company analysis, an investor also
considers the company’s history, focusing on events which
have contributed in shaping the company.

4. Company analysis expects an invest analyst to derive an
understanding of a company in terms of:
 Its strengths and risks
 Computing the intrinsic value of the firm’s stock
 Comparing the intrinsic value of a stock to its market
value to determine if the company’s stock should be
purchased

5. Company analysis- Firm competitive
strategies
In describing competition within industries, there are
four competitive forces that could affect the competitive
structure and profit potential of an industry.
 Current rivalry
 Threat of new entrants
 Potential substitutes
 Bargaining power of suppliers and buyers

6. Company’s competitive strategy
A company’s competitive strategy can either be defensive
or offensive
 Defensive Strategy
 Offensive Strategy

7. Basic Financial Statements
Financial statements provide majority of financial
information about firms.
 Balance Sheet
 Income Statement
 Cash flow Statement

8. Analyzing Financial Ratios
Analyzing key ratios:
 EPS is the measurement of the Company’s Profit
 P/E Ratio is used to determine how much investors are
willing to pay for a stock relative to the company’s profit
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑡𝑜𝑐𝑘
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
 Debt/Equity is a measure of the company’s financial
leverage
𝑃𝑟𝑜𝑓𝑖𝑡 − 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑
# 𝑜𝑓 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑠ℎ𝑎𝑟𝑒𝑠

9. Conclusion
Company analysis is mainly necessary to the investor
who wants to invest in that particular company.