In the analyzing annual reports category, I have also included many articles on ratio analysis,etc for financial expertise to review/analyse the performance of an entity.

In addition to this ratio analysis, we should also look at broadly the following four(4) segments/spectrum so as to be able to adequately  conclude on the entity’s performance:

1. Industry analysis
2. Business analysis
3. Management quality
4. Financial analysis

In the Industry analysis, we should review the following:

• Structural characteristics
• Basis of Competition
• Barriers to Entry
• Demand/Supply Scenario
• Government Regulation/policies

For Business Analysis:

• Market position
• Product Diversity
• Operating eficiency
• Cost Structure
• Raw Material Supply
• Labor Relations

For Financial Analysis, we have:

• Accounting quality
• Earnings protection
• Cash Flow Adequacy
• Financial Flexibility\

Last but not least the Management quality should be reviewed for:

• Track record
• Capacity to overcome adversities
• Goals, philosophy and strategies

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