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Equity InvestmentsModule 5 of 6

Company Analysis: Past and Present

4

Concepts

2

Formulas

0

Decisions

1

Quiz Questions

Key Concepts

4 concepts covered in this module.

Business Model Analysis

Revenue drivers, pricing power, cost structure (fixed vs variable), competitive position.

Revenue Analysis

Top-down (economy → industry → company) or bottom-up (product-level). Identify volume vs price drivers.

Operating Profitability

Gross margin, EBITDA margin, operating margin. Trend analysis and peer comparison.

Working Capital Efficiency

Cash conversion cycle, receivable/inventory/payable days. Links to FSA.

Formulas

2 essential formulas for this module.

DuPont Analysis (3-part)

ROE = Net Margin × Asset Turnover × Equity Multiplier

Where: Profitability × Efficiency × Leverage

DuPont Analysis (5-part)

ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage

Where: Decomposes ROE into 5 components

Mind Map

Visual overview of how concepts connect in this module.

Company Analysis
Revenue
Volume vs price
Top-down analysis
Market share trends
Profitability
Gross margin
EBITDA margin
Net margin
DuPont decomposition
Efficiency
Asset turnover
Working capital cycle
Capital intensity
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Business Model Analysis

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Revenue drivers, pricing power, cost structure (fixed vs variable), competitive position.
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