When you're thumbing through annual reports, proxy statements and analyst ratings of multiple companies, the numbers can start to blur together. On top of that, once you've taken a look at all the financials a company has to offer, you can find yourself wondering what the significance is of the figures you've been looking at. It's information overload and it's to be expected in any situation where fairly abstract ideas, like solvency ratios and assets per share, are thrown about in large quantities. In this article, we'll show you how to organize all the company information you've gathered into a readable and useful format.

Just sitting down with a bunch of financial statements isn't a very efficient or effective way of determining whether or not a company is a good investment decision. You've got to organize your thoughts - otherwise you're just going to be spinning your wheels. That's why creating your own investment analysis form can be one of the most valuable investment tools in your arsenal. An investment analysis form is a tool that you can use to help gather numbers and essential information needed to make an investment decision in one easy-to-use format. (Find out more about the companies you're investing in, see Putting Management Under The Microscope, Introduction To Fundamental Analysis and What Are Fundamentals?)

Simplify Your Research
An investment analysis form is the perfect place to record key figures and pieces of information about your company as you find them in your research. This can be done on a customized form on a sheet of paper or on the computer through a spreadsheet program.

An investment analysis form allows you to better interpret your data systematically, as all of the information is collected into a standardized format. Because information is plugged in uniformly, you're guaranteed not to miss anything that you have deemed important.

An investment analysis form also allows an investor to simplify his or her research by only looking at information that is relevant to the investment decision, while throwing out any superfluous data. There are a lot of reasons why you might run into extraneous information in your research, but unless you make sure that it's kept out of your investment criteria, it's difficult to say whether or not unimportant information is influencing an important decision.

You can bet that investment professionals don't just go at a 10-K without a plan, and neither should you. (To learn more, see Evaluating A Company's Capital Structure, What You Need To Know About Financial Statements and Footnotes: Start Reading The Fine Print.)

Collect Key Figures
Information Within the Form


The first step in developing your own investment analysis form is determining what you want to include in it. There are some figures that are essential and some that will be specific to your individual investing style.

Things like recent stock price, earnings per share (EPS), price/earnings ratio and total debt are pretty universal. Don't have an investment form that is missing an essential piece of financial information - anything that you would expect to see on the stock quote page of your favorite financial website should probably be included. (To learn how to find a company's EPS or p/e ratio, read Types Of EPS, Earnings Forecasts: A Primer and Understanding The P/E Ratio.)

Numbers aren't the only thing that belongs on the form. You'll definitely want places to write in things like products, addressed and unaddressed risk, legal troubles and the like. Your personal instincts and impressions after doing your research will be invaluable when you go back to looking at the stock a day or a year down the road, so make sure that you have a place to write them down. If you do a lot of investment research, it's even easier to forget your impressions about a certain stock. That's when having all those comments right at your fingertips is such a benefit. (Learn why it is helpful to keep a log of your instincts and actions, read Lessons From A Trader's Diary.)

Now that you've got the essentials and the write-ins taken care of, don't forget the simple stuff. Have a place for the company name, the symbol and the date you did your research. Include things like state of incorporation, investor relations contact and a phone number for the main circuit board. While it may seem like a lot, it sure comes in handy when you need to reach someone to voice your concerns or just to get the latest financials from the company.

The process of creating an investment form is not a one-time deal, as you will likely make many changes over time as you hone your analysis skills.

Creating the Form
There are a couple of ways to set up your form. You can take a pen and paper and set up your spaces to write in information or, for the technically inclined, you can put it together on your computer using anything as simple as a word processor or as complex as professional page layout software.

If you'd prefer to go paperless, using a spreadsheet program like Microsoft Excel can offer you quite a bit of flexibility. If you prefer to use the old-school paper method, take your form template to your closest copy center and go copy crazy. Make enough copies so that you won't have to worry about running out in the near future. That way, when they are finally ready for some analyzing, you'll have all the blank copy forms you'll need.

Analyze Your Investments
Once you're all set up with a form of your own, you'll probably find that collecting your thoughts is a lot easier than it used to be. If you can interpret a stock quote online, you should have no problem interpreting the data you'd want to include on your form. It just simplifies the process of investment analysis.

Where the idea of an investment analysis form really shines is when you're trying to scale across investments. Having information available to you in an organized way for multiple companies makes a comparison of two companies a much less impractical task and can help cement your understanding of what attributes make for an attractive investment. Just don't forget that an investment analysis form is just an aide. It won't tell you whether a particular stock is a smart investment, but it can help you organize your thoughts and data so that you can make that determination for yourself.

Scouring through piles of 10-Ks can be an unpleasant and confusing task, especially for a less experienced investor, but with the right tools for the job, making use of the information you collect can be all the easier. Creating your own investment analysis form can enable you to interpret the information you deem important in selecting an investment without losing your head in a sea of numbers.

Download a Sample Investment Analysis Form here.

Related Articles
  1. Investing Basics

    Fee-Only Financial Advisors: What You Need To Know

    Are you considering hiring a fee-only financial advisor or one who is compensated via commissions? Read this first.
  2. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  3. Professionals

    The Best Financial Modeling Courses for Investment Bankers

    Obtain information, both general and comparative, about the best available financial modeling courses for individuals pursuing a career in investment banking.
  4. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  5. Personal Finance

    How the Social Security Reboot May Affect You

    While there’s still potential for some “tweaking” around your Social Security retirement benefits, I’d like to share some insight on what we know now.
  6. Investing Basics

    Do You Need More Than One Financial Advisor?

    Using more than one financial advisor for money management has its pros and cons.
  7. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  8. Technical Indicators

    Using Pivot Points For Predictions

    Learn one of the most common methods of finding support and resistance levels.
  9. FA

    Paying for College: Utilize These Top Hacks

    Saving money for college is difficult for many families, but it doesn't have to be. Here are some overlooked hacks to save money on college costs.
  10. Financial Advisors

    Bull vs. Bear Markets: How to Be Prepared for Both

    Bull and Bear Markets are a reality that every investor must be prepared for. Here are a few tips.
  1. Do financial advisors charge VATs?

    The Personal Finance Society (PFS) and with Her Majesty's Revenue and Customs (HMRC) have outlined when a value-added tax ... Read Full Answer >>
  2. Do Sallie Mae loans go directly to your school?

    Sallie Mae is the biggest provider of financial aid and student loans in the United States. The company operates as a private ... Read Full Answer >>
  3. What are working capital costs?

    Working capital costs (WCC) refer to the costs of maintaining daily operations at an organization. These costs take into ... Read Full Answer >>
  4. Can working capital be too high?

    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
  5. Do financial advisors get paid by mutual funds?

    Financial advisors are reimbursed by mutual funds in exchange for the investment and financial advice they provide. A financial ... Read Full Answer >>
  6. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
Trading Center