FIRM ANALYSIS

What is Firm Analysis?

Firm analysis is the examination and interpretation of the firm's past performance and current data.
The balance sheet and income statement are often used. At the same time, financial statements,
information, news and reports about the company are also parts of the company analysis. There are
many companies in the market and sectors. In the fundamental analysis, a firm analysis is made,
estimations are made about the future position of the firm, the firms are eliminated and the investment
decision is made in the stocks of the selected firm.

Investors investing in the stock market have to be very careful when choosing the company they will
invest in. Firm analysis should be done in detail for company selection. When examining a company,
the investor should analyze the basic concepts such as the partnership structure of the company, the
management structure, the financial statements of the company, the position of the company in the
sector, its market share, and product features. In addition, they should follow the rate of stocks
circulating in the market, the average trading volume of the stock, in which indices it is traded, in
which stock group it is in, the distribution and profile of the investors investing in the stock, company
statements about it, news and comments in the press.

While making the Firm Analysis, the Market Price, Market Value, Firm Value and financial analyzes
of the company to which the stock investment will be made are among the most important concepts to
be considered while making the investment decision.

The main factors in making firm analyzes are to make predictions about the future by examining the
company's past performances and data for the current period. Thus, the decision whether to invest in
the stocks of the company in question will be made in a healthier way.

Stages of Firm Analysis

First of all, SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) should be done, which
provides information to investors about determining the company's weaknesses and strengths and its
competitiveness. With this analysis, it is tried to reach the result by revealing the strengths and
weaknesses in detail.
In fundamental analysis and firm analysis, there are two main areas of study: qualitative and
quantitative factors. Qualitative factors related to the company include the characteristics of the goods
and services produced by the company, the demand situation, the market share and the quality of the
company's management. Quantitative factors are the financial statements and reports showing the
financial status of the company and the financial statements and reports of the previous year. Based on
these data, the financial performance of the company is analyzed.

How to Make an Firm Analysis?

A two-stage method is often used when making firm analysis. First, company information, the
company's situation in the sector and the market are researched. As the second stage, the firm analysis
is completed by making financial statement analysis.

For company information

* Initial partnership, partnership structure, major partners and management
* Products and services, brand strategy
* Other investments of the company
* News and comments about the company

For sector status

* Firms in the sector
* Company's share in the sector
* Differences with other companies and performances of other companies

For market situation

* Financial statements of the company
* Dividend distribution, capital increases
* Trading volume and issuance amounts of stocks
* Whether or not foreign investors are in their target
It is necessary to collect and analyze such information.

These reviews form the first step for firm analysis. The second stage is carried out with financial
statement analysis.

Financial Statement Analysis

Financial statement analysis is a method of analysis by examining the balance sheet and income
statement data of the company.

* Financial statements are prepared by the Company in order to fulfill the reporting function, which is
one of the main duties of accounting.
* Businesses provide information about the financial status of the business to business partners and
other interested parties by issuing financial statements at regular intervals.
* The purpose of the financial statements and financial analyzes is to determine the liquidity status,
profitability status, capital structure, usage status of the assets, and important trends about the
business.