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Company Research: Strategies

Getting Started on Company Research

Before You Begin Your Research

As with any research project, the first thing you need to do before beginning to search for information is to determine the size and scope of your project or assignment. A one-page report for an introductory general business class may require less information than a detailed 30-page final presentation in an advanced graduate class in investment analysis. On the other hand, researching a company in which you may invest your own money might demand a completely different approach from any class assignment. Consider the kinds and amount of information you might need.

Furthermore, if you are required to write up a report, check first on any formatting requirements for the assignment. Is it supposed to follow APA style, MLA, Chicago Manual of Style, or does it matter at all? Knowing the requirements as you do your research can save you a lot of work later in the process.

1. Let's Begin: Company Basics

Begin your company research by obtaining some basic information about the company. What is the official name of the company? Is it a subsidiary of another company, or is it the parent company? Is it publicly or privately owned? Is it based in the United States or is it foreign-owned? The answers to these questions will help to guide and limit your research as you proceed.

Among the best sources of this information are the company directories, such as Mergent Online or Business Insights: Essentials. There is usually a brief overview and company history in these sources. You can also find some basic company information on the open Web, through such sites as Yahoo Finance and Hoover's, or even by performing a search of the open Web using search engines like Google, Bing or Yahoo.

2. Let the Company Speak for Itself: Finding Company Materials

Most companies have a lot to say about themselves. Nearly all large companies (and most small ones, too!) maintain a Web site. Find this Web site through a search engine like Google, Bing, or Yahoo. On the company's Web site there is normally a link to a section called "About Us" which tells you something about the company, and publicly held companies may have a section entitled something like "Investor Relations," or "About the Company." These pages may include a company history, mission and values statements, Annual Reports, and even SEC filings. Keep in mind that these company Web sites are designed to present the company in the most favorable light, but this can provide valuable insights into how a company sees itself.

Many company Web sites and catalogs also offer an easy way to review the company's products, prices, policies and marketing strategies. What does the company focus on? Quality? Discounts? Image? Technical specifications? Do you think their approach is appropriate and effective given market conditions? Examine anything you can find: Web sites, annual reports, catalogs, advertisements, brochures and so forth.

3. Digging Deeper: Show Me the Data!

Companies love to present their efforts in the best light, but financial data offer a cold, hard look at a company's performance. Investment analysts want to obtain accurate accounting figures for the companies in which they are considering investing. The Securities and Exchange Commission (SEC) tries to assure that at least publicly held companies are providing this kind of accurate, transparent accounting to all of their shareholders. It would be naive to think this is a perfect system, but the law requires public companies to report their financial activities clearly and concisely, and the government must, in turn, make this information available to the public. Take advantage of the availability of detailed financial information about publicly owned companies.

You can examine the financial data through company directories, including Mergent Online, Business Insights: Essentials, Value Line, Standard & Poor's Net Advantage, and others. Most list financial statements from the company, some back as far as 15 years. Several of these databases provide cash flow, income statements, balance sheets, and information from other SEC filings. You can also review key business ratios, and compare the company's performance to its competitors. Each database provides different pieces of information; take the time to explore them all! Both Mergent Online and Standard & Poor's Net Advantage also offer at least limited information on privately held firms.

4. How the Company Stacks Up: Industry Information

When analyzing a company's performance it is helpful to understand the industry in which the company operates. Some industries may, for example, be hit harder by a downturn in the economy than others. Or new technologies might change practices and policies for an entire industry.

You can view industry information in several of the company directories, such as Mergent Online, Business Insights: Essentials, Value Line, and Standard & Poor's Net Advantage. For more information on finding industry information, try the Industry Research page.

5. Go to the Professionals: Read Analysts' Reports

Remember, you're not alone! You are not the only person trying to determine how well a company is doing. Professional analysts and business pundits from around world work tirelessly to make sense of all those numbers.

A good source of analysts' reports is Business Insights: Essentials, at the Investment Reports tab. Highly detailed reports are available from Standard & Poor's Net Advantage, in the Stock Reports section of the Company Profile. You find a very condensed yet thorough analyst report in the Company Surveys of the highly respected Value Line database.

6. The Word on the Street: Get the News and Up-to-Date Information About Company Activities

This is where you pick up on current news, the media's reaction to your company's actions, and critical events like lawsuits, recalls, or relevant legislative changes. You can also locate the company's own press releases to gauge their communication with the market.

For articles and detailed reports on specific companies, try business article indexes like ABI/Inform and Business Source Complete. Both are thorough, and offer many full-text articles. For news, press releases, wire services and other sources of up-to-the-minute information, try LexisNexis Academic (use the News tab, and choose the sources from the menu).

Putting It All Together

Weeks or months of research are not very helpful if you can't put the information in some kind of rational order and present the results to others in an understandable form. The outline above may, in some cases, also provide a rough outline for presenting your results. In most cases you will want to begin with basic information and a brief history, moving through more and more detailed data. In the end, however, it will be as much art as science when you look over your mounds of data and finally make the all-important decision...what is this company going to do in the future, and how sure am I that it will actually do it? If you get stuck, or need advice, speak to your course instructor, to the Business Librarian, or, if you have trouble writing up your results, contact the Old Westbury Writing Center in room L300 in the Library (on the upper floor).