A compelling company narrative should be tested against the business model, accounts, and risks.
Describe the business in plain English
Explain what the company sells, who pays for it, and what could cause those customers to leave. Identify whether sales depend on recurring demand, a small group of buyers, or a particular economic cycle. If the explanation needs jargon to sound convincing, the research may need another pass.
Follow the cash
Compare the income statement with the cash flow statement and balance sheet. Ask how much capital the business needs to operate and whether growth requires additional borrowing or new shares. Accounting profit and cash available to the business are different perspectives on the same activity.
Make assumptions visible
Valuation depends on expectations. Record the assumptions about future sales, margins, funding needs, and competition. Then ask what a less favorable case would look like. A precise spreadsheet result should not obscure uncertainty in its inputs.
Keep an evidence trail
Use company filings as a starting point, recording the reporting period and page references. Separate management statements from your own interpretation. Revisit an argument when new evidence contradicts it; a falling or rising share price alone does not explain what changed in the business.
Sources & context
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