I was discussing investment strategies with one of my kids and I was attempting to explain the analytics that I encourage my clients to follow, is similar to how publically traded companies are analyzed.
Broken down into the simplest terms they follow this pattern:
- Determine company metrics
- Determine competitor’s metrics
- Determine category metrics
- Determine value statement
- Determine efficiencies based upon value statement
Larger companies there will need to be an attempt to separate the individual production units for individual analysis, with same metric analysis.
Publically traded companies are required to file quarterly 10Q’s and annual 10K’s. The notes on these reports tell the true story that is not always spelled out in the financial data.
Granted my clients are not using Bloomberg terminals for analyzing their competitors, nor are they using them for their investments portfolios.
But financial analytics remain an extremely important and useful tool for running your business well.