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Factors in performing company analysis
markets Covers analysis of factors to determine whether a company is a good investment.
Key Rules
- ✓All relevant documents and sources of information
- ✓Clear explanations of company analysis to retail clients when requested
- ✓Collaboration and consultation with internal and external subject matter experts
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Statement of financial position
markets Covers the purpose and content of a company's statement of financial position.
Key Rules
- ✓Format and items included and how they are classified
- ✓Purpose of the statement of changes in equity and its relation to the balance sheet and earnings statement
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Statement of comprehensive income
markets Covers the purpose and content of the statement of comprehensive income, including sources of income.
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Statement of cash flows
markets Covers the purpose and content of the statement of cash flows.
Key Rules
- ✓Cash flow from operating activities
- ✓Cash flow from investing activities
- ✓Cash flow from financing activities
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Other factors regarding financial statements
markets Covers additional factors relating to company financial statements.
Key Rules
- ✓Note for the financial statements
- ✓Auditor's report
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Analyzing financial statements with ratios
markets Covers analysis of basic financial statements to give meaningful responses, including ratio calculations.
Key Rules
- ✓Liquidity ratios (current, quick, cash)
- ✓Risk analysis ratios (debt to equity, debt to assets, interest coverage)
- ✓Profitability ratios (profit margins, return on assets, return on invested capital)
- ✓Efficiency ratios (fixed asset, inventory, receivables, payables, working capital turnover)
- ✓Equity ratios (dividend payout, retention rate, earnings per share, book value per share, free cash flow to equity)
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Analyzing financial statements for investment value
markets Covers analysis of financial statements to respond on the investment in question.
Key Rules
- ✓Value ratios (EPS, price to earnings, dividend yield, dividend cover, dividend payout, equity to common share)
- ✓The use of trend analysis and external comparisons
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Information from exchanges and regulators
markets Covers types and uses of equity and fixed-income information provided by exchanges and regulators.
Key Rules
- ✓Price, volumes, yields and market capitalization
- ✓Restrictions including cease trade orders (CTOs)
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Purpose and uses of market indices
markets Covers the purpose, construction and uses of market indices.
Key Rules
- ✓How index values are constructed
- ✓Index vs. average vs. multi-factor
- ✓Market-value-weighted vs. price-weighted vs. equal-weighted
- ✓Price return vs. total return
- ✓Asset class, sector, country, international
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Use of indices
markets Covers applying indices to market summaries and benchmark performance.
Key Rules
- ✓Providing a market summary
- ✓Calculating performance versus a benchmark
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Methods of assessing stock market behaviour
markets Covers analysis of methods used to assess stock market behaviour.
Key Rules
- ✓Importance of using different sources of company analysis and information
- ✓Fundamental analysis
- ✓Quantitative analysis
- ✓Technical/statistical analysis
- ✓The assumptions and valuation approaches which may be used
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Classifying industries into sectors
markets Covers how industries are classified into sectors and interpreted in stock valuation.
Key Rules
- ✓Consumer products
- ✓Manufacturing industries
- ✓Service industries
- ✓Technologies
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Macroeconomic factors on securities prices
markets Covers applying macroeconomic factors to investor expectations and market movements.
Key Rules
- ✓Interest rates
- ✓Inflation
- ✓Employment
- ✓Productivity
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Factors impacting performance expectations
markets Covers analysis of other factors impacting performance expectations over various time horizons.
Key Rules
- ✓Asset class
- ✓Volatility
- ✓Market sector
- ✓Economic cycle
- ✓Benchmarks
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Factors involved in performing company analysis
markets Analyzes the factors in company analysis to determine if a company is a good investment.
Key Rules
- ✓All relevant documents and sources of information
- ✓Clear explanations of company analysis to retail clients when requested
- ✓Collaboration and consultation with internal and external subject matter experts
📌
Purpose and content of the statement of financial position
markets Covers the format and classification of the statement of financial position.
Key Rules
- ✓Format and items included and how they are classified
- ✓Purpose of the statement of changes in equity and its relation to the balance sheet and earnings statement
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Purpose and content of statement of comprehensive income
markets Covers the statement of comprehensive income and sources of income.
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Purpose and content of the statement of cash flows
markets Covers the components of the statement of cash flows.
Key Rules
- ✓Cash flow from operating activities
- ✓Cash flow from investing activities
- ✓Cash flow from financing activities
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Other factors regarding company financial statements
markets Covers supplementary elements of financial statements.
Key Rules
- ✓Note for the financial statements
- ✓Auditor's report
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Analyzing financial statements on the company
markets Analyzes financial statements to give meaningful responses on a company, involving ratio calculations.
Key Rules
- ✓Liquidity ratios – current, quick and cash ratios
- ✓Risk analysis ratios – debt to equity, debt to assets, interest coverage
- ✓Profitability ratios – profit margins, return on assets, return on invested capital
- ✓Efficiency ratios – fixed asset, inventory, receivables, payables, working capital turnover
- ✓Equity ratios – dividend payout, retention rate, earnings per share, book value per share, free cash flow to equity
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Analyzing financial statements on the investment
markets Analyzes financial statements to give responses on the investment, involving value ratios and trends.
Key Rules
- ✓Value ratios – EPS, price to earnings, dividend yield, dividend cover, dividend payout, equity to common share
- ✓The use of trend analysis and external comparisons
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Information provided by exchanges and regulators
markets Covers types and uses of information for equities and fixed income from exchanges and regulators.
Key Rules
- ✓Price, volumes, yields and market capitalization
- ✓Restrictions including cease trade orders (CTOs)
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Other factors impacting performance expectations
markets Analyzes factors affecting performance over various time horizons.
Key Rules
- ✓Asset class
- ✓Volatility
- ✓Market sector
- ✓Economic cycle
- ✓Benchmarks