This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 3 of 7 · 13 min
The body of the report: business, peers, financials, valuation, risks and ESG
Behind the rating sit the supporting sections: a business and industry description written for non-specialists, a carefully judged peer group, focused financial analysis, a valuation using more than one method, risks translated into numbers, and sustainability where it is material.
In short
- The business description explains how the company creates value (products, customers, suppliers, revenue and cost drivers) in plain language for a broad audience, not for specialists.
- A peer group needs judgement: filings often do not name competitors, and data providers' screens give different answers. Five forces and PESTLE should focus on the factors that matter most, not be a checklist.
- Financial analysis is selective: the key measures that support the thesis, read from the filings and footnotes, often including industry-specific metrics such as RASK and CASK for airlines.
- Valuation usually combines more than one method (present value and relative); multiples must be defined consistently for the company and its peers.
- Investment risks (company, industry, macroeconomic) should be translated into the valuation, for example with scenarios. A sustainability section goes deeper where ESG factors are financially material.
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