Company Analysis

Financial analysis Print Email

Introduction to Company Analysis

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. It is also referred as ‘fundamental analysis.’ A company analysis incorporates basic info about the company, like the mission statement and apparition and the goals and values. During the process of company analysis, an investor also considers the company’s history, focusing on events which have contributed in shaping the company.

A company analysis also looks at the goods and services offered by the company. If the company is involved in manufacturing activities, the analysis examines the products that the company produces and also analyzes the demand and quality of these products. Conversely, if it is a service company, the investor studies the services offered.

How to do a Company Analysis

It is essential for a company analysis to be comprehensive to obtain strategic insight. Being a thorough evaluation of an organization, the company analysis provides insight to rationalize processes and make revenue potentials better.

The process of conducting a company analysis involves the following steps:

  • The primary step is to determine the type of analysis which would work best for your company.
  • Research well about the methods for analysis. In order to perform a company analysis, it is important to understand the expected outcome for doing so. The analysis should provide answer about what is done right and wrong on the basis of a thorough evaluation. It is, therefore, important6 to make the right choice for the analysis methods.
  • The next step involves implementing the selected method for conducting the financial analysis. It is important for the analysis to include internal and external factors affecting the business.
  •  As a next step, all the major findings should be supported by use of statistics.
  • The final step involves reviewing the results. The weaknesses are then attempted to be corrected. The company analysis is used in concluding issues and determining the possible solutions. The company analysis is conducted to provide a picture of the company at a specific time, thus providing the best way of enhancing a company, internally as well as externally.

Staff Responsible for Company Analysis

Company analysis is typically the responsibility of several different staff members, depending on the level of analysis being performed. These include:

  1. Financial Analysts: These individuals are responsible for analyzing a company's financial statements and performance, including balance sheets, income statements, and cash flow statements. They use financial ratios and other tools to evaluate a company's liquidity, profitability, solvency, and efficiency.
  2. Investment Analysts: These individuals are responsible for analyzing a company's stock performance and potential as an investment. They use financial ratios and other tools to evaluate a company's financial health and potential for growth.
  3. Credit Analysts: These individuals are responsible for analyzing a company's creditworthiness and ability to repay loans. They use financial ratios, credit reports, and other tools to evaluate a company's solvency and ability to meet its financial obligations.
  4. Market Analysts: These individuals are responsible for analyzing a company's performance and potential in the context of its industry and the overall market. They use financial ratios, market research, and other tools to evaluate a company's competitiveness and potential for growth.
  5. Strategic Analysts: These individuals are responsible for analyzing a company's overall strategy and performance. They use financial ratios, market research, and other tools to evaluate a company's competitiveness and potential for growth, and make recommendations for improving the company's performance.
It's worth to mention that in large companies, analysis is usually performed by different teams or departments within the company, each with a specific focus or area of expertise.

Company Analysis for Small Businesses

Small  businesses  can benefit from company analysis just as much as larger companies. By analyzing their financial performance and market position, small businesses can gain a better understanding of their strengths and weaknesses and make more informed decisions about how to grow and improve their business.
It's especially important for small businesses to monitor their liquidity because they may have limited access to credit and may not have the same resources as larger businesses to meet short-term financial obligations. By analyzing their current ratio, quick ratio and cash flow, small companies can identify potential liquidity issues and take steps to address them.
Profitability is also an important area for small companies to monitor, as it can indicate whether the company is generating enough revenue to cover its expenses and grow the business. By analyzing their net profit margin, gross profit margin, and return on assets, small businesses can identify areas where they can reduce costs and increase revenue.
In addition, small companies can benefit from analyzing their industry and competitors to identify trends and opportunities and adapt their strategies to the marketplace. Financial metrics can be a useful tool to compare their performance to industry averages and identify opportunities for improvement.

Overall,  company analysis can be an important tool for small businesses to understand their financial performance, identify areas for improvement, and make informed decisions about how to grow and succeed in their industry.

Quote Guest, 19 August, 2018
This is good information, but there are several typos. You need to edit your posts before you post them.
Quote Guest, 16 October, 2018
what do you mean to determine the type of analysis?
your post lack explanation.
Quote Guest, 1 May, 2020
Quote
Guest wrote:
what do you mean to determine the type of analysis?
your post lack explanation.
As far as I know there are different types of analysis could be PERT. It gonna depend what kind of analysis does your professor wants you to do.
Quote Guest, 16 May, 2020
Can be marketing analysis one of the type of company analysis?
Quote Guest, 16 May, 2020
Quote
Guest wrote:
As far as I know there are different types of analysis could be PERT. It gonna depend what kind of analysis does your professor wants you to do.
Hello, is marketing analysis kind of company analysis?
Thanks for the answer.

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