Mission
The financial performance of a business based on facts
Independent
Company Research is Business Analysis to determine the financial performance of
a business based on facts. The purpose is to highlight the strength and
weaknesses of the business in order to warn investors or potential investors of
the possible effect on share values with regard to the under performance of the
business reviewed or to assure investors of the potential of well
run businesses. The review carried out is honest and not influenced by any
financial, commercial, industrial or political organisation. This is carried out
for commercial and industrial enterprises quoted on the Swiss and major European
Stock Exchanges only. Banks ,insurance companies or financial institutions are
not reviewed .
Role
Gathering information given by quoted companies
The Business
Analysis is carried out by using annual and interim reports, press releases and
gathering information from Company Presentations at conferences. Hence the
Review is carried out based on the facts given by quoted companies. The analysis
consists of :
(a) Input of the financial information into a financial modelling system.
(b) The documents are examined to determine if any detail is provided for the
various items on the Income Statement and Balance Sheet. Where it is found that
accounting methods have been changed or items classified to increase Operating
Profit or decrease Financial expenses we make the correction in our Review. We
also look for off balance sheet borrowing.
(c) The financial statements presented in our review always agree with the
final results of the Income Statement (Profit after Tax) Balance Sheet ( Net
Equity) Cash Flow Sttaement ( Increase/Decrease in Bank Balances. If there are
items charged to Equity without going via the Income Statement or Goodwill not
being amortised we make the adjustment and show the differences in our review.
(d) The next step is to prepare the review under the following headings :
Profitability– Comment on Gross Profit, Operating Expenses Structure, Operating Profit
and Financial Expenses. The Breakeven point is calculated to show the
vulnerability of the business. If possible divisional profitability is also
analysed. This gives the reader an indication as to the problem areas in the business.
Working Capital & Debt – The working capital ratios
will show whether the collections are efficiently carried out or sales have been
inflated. Are payables being used for financing ?
Long Term and Short Term Bank borrowings are analysed to see if
the business has a debt burden.
Cash Flow as earned prior to any financing arrangements.
(e) Intrinsic growth of business – It is demonstrated if the Group has
grown from its original investment in subsidiaries purchased. An innovation.
(f) A grading is given to the company concerned which is an alert for risk
assessment. This is based on direct company performance and strategy and is not
based on the averaging of share prices and extrapolations. ( See Information
Pack or CD for Gradings)
Maintaining and Developing The Independent Company Research Data Base
At the present time we analyse on a continuous and systematic basis
100 industrial and commercial companies quoted on the Swiss,
French, German, and London Stock Exchange and any other by request.
Examine each company from a business point of view
Each company we research is examined from a business point
of view to alert investors with regard to the viability of the business.
The business may have taken certain steps to grow by acquisition. Did it overpay
and is the goodwill arising going to affect future profits. Some companies when
reporting try to change the accounting rules to show a favourable picture of the
financial results for the short term. This could catch up with them when in the
following year business is bad and they need to charge the costs hidden
previously . A common term used is restructuring costs. By an investor knowing
this before the damage is done , he or she could take the appropriate action in
time.
Publication of The Independent Company Research Review
The cost of getting this information from the Independent Company Research
is minimal compared to the losses in cash which can be avoided. Once you have
become a subscriber of the Review or client of the Independent Company Research we are here to
answer your questions and to be of assistance with regard to
- the assesment of the real performance of quoted
companies,
- the availability of a sound second - opinion
to comment on the results analysed,
- the factual grading of the company under review.
