How to Identify Companys Core Competency from different financial data like Balance sheet, ratios, P&L account?
This was selected as Best Answer To do a core competency analysis, you probably want to look at not only the Balance Sheet and P &L statements but also the documents accompanying these financial statements like the Chairman’s report, the Report of the Directors, the Auditor’s report as well as the notes to the accounts. Besides these, check out news releases and press statements during quarterly earnings reports. Below is a listing of some indicators of what core competency exists currently and what is being developed by a company 1. An obvious indicator would be the key revenue generating segments of the company and their growth trends over the last 3-5 years. 2. Investments in specific segments like a manufacturing company investing heavily in expanding its services capability (check for disproportionate increase in staffing or office expansion expenses, notes to accounts, comments in the directors and chairman’s report etc.). 3. Trend of investment in R&D and the type of R&D; the na
