Finance: What do financial analysts ask? (Part 1)

9 years ago - Published in Expert opinion

The issue of intangibles is an increasingly crucial topic and for this reason it is important to be at the center of the discussion. It would appear to be an innocuous, not central theme, while instead it elicits strong debate between schools of thought which focus on the role and weight that intangible resources should play in the evaluation of companies. Given these premises the AIAF Mission Intangibles working group conducted the survey "What do financial analysts ask?" aimed, first and foremost, at the more than one thousand members of AIAF and all those who operate as Financial Analysts.

 

The objective of the survey was to understand if the Integrated Report proposed by IIRC, which includes also non-financial information relating to intangible resources and risks and environmental social and governance issues (ESG) and allows financial analysts to acquire an important database, can be used to more easily compare organizations working in the same sector, market or economic area and to make, therefore, a reasoned judgment on their ability to create value. In other words, through Integrated Reporting analysts can understand how businesses are facing the challenges that arise for a business in the 21st century, so they can make better assessments over the short, medium and long term.

 

According to those surveyed, 76.4% consider strategy the most important ‘type of non-financial information’ for a final view for the purchase, retention or sale of securities. It is a clear indication that analysts can benefit from Integrated Reporting, which puts strategy and the business model at the heart of reporting. Integrated Reporting brings with it the opportunity for more stable long-term returns through access to wider information on a range of capitals that are relevant to the business. Furthermore, it gives investors greater confidence in the management of the companies they invest in through the company evidencing integrated thinking in its approach to value creation over time.

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