Managerial analysis, as qualitative analysis, is the most valuable tool in decision making which applies to every institution. Several qualitative indicators can jointly produce some guiding indications to evaluate the management soundness. The managerial analysis using qualitative characteristics and various other factors of the organization provides the true picture of the context and the reality of the ongoing phenomena in the real place.
thank you for the inspiring question, Doctor. For me, the analysis of the management process is crucial, because I believe that the most important factor in creating the market value of a listed company is the quality of management (finance, assets, projects, teams of people). However, the importance of this method in my analyzes has a different weight, depending on what resources are managed by managers (material resources, non-material resources, it is more difficult to manage non-material resources) and what challenge they face in their work when they start a contract. Therefore, the importance of the managerial analysis is 20-30% and depends strictly on the given case of the company and its market. If you would like to go deeper, feel free to ask for additional details. Best regards
In my opinion, in the situation of conducting a full, multi-factorial, containing quantitative elements (ratio analysis, financial analysis, technical analysis, etc.) and qualitative elements (management style, characteristics of the product and service offer, technologies used, structural change processes, description of the market and economic environment of the respondent) economic entity, etc.) fundamental analysis is a matter of assessing the effectiveness of the management process of an organization and is one of the key areas that should be thoroughly analyzed. However, the issue of evaluating the company management process should not cover more than 20-30 percent. the entirety of fundamental analysis.
Best regards,
Dariusz Prokopowicz
Yes, It’s the People behind a company that can have greater impact on the functioning of the organization. A great company could be brought to its knees by bad management. An obscure company could become prominent, by good management. So, in my own viewpoint, I give more weightage to it after ensuring that the business sector, model, and financial performance are correct.
It’s the People behind a company who can make it or break it. A great company could be brought to its knees by a bad management. An obscure company could become prominent, by a good management.
So, yes, when analyzing businesses, I do give a high weight to management. There are innumerous examples of companies with a great management, which turned out to be multibaggers.
But having said that, other key factors — particularly the sector, the company’s business model and balance sheet — all play important roles in determining in which direction the company goes in future.
If at all I were to assign weights they would be:
- Management 30%
- Sector 25%
- Business model 25%
- Balance Sheet 20%
Hope this helps.
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