Whether you perform a handful of valuations or hundreds each year, every new engagement can require quickly getting up to speed on an industry you may know little about. One month, you might be valuing a cement producer, while you’re looking at a dental practice or a trucking firm the next month. Every new engagement can require understanding an unfamiliar industry’s economics, competitive dynamics, risk factors, and growth prospects before meaningful valuation work can begin. work can begin.
A First Research industry profile is a one-stop shop to access a wide range of industry information. Instead of spending hours gathering basic information from multiple sources, valuators can quickly develop a foundational understanding of the industry and identify the relevant factors that require deeper investigation.
Each First Research industry profile is organized by NAICS and SIC code and written for non-specialists, by industry specialists. Many of the specialists writing these reports boast advanced degrees and 10-20 years of experience writing about companies and industries.
The profiles are constantly updated with the latest information and industry indicators. Updates are implemented in regular cycles. Every month, each industry profile is updated with the freshest statistical data. Every quarter, they’re reviewed and updated by an industry specialist. Economic statistics, employment and wage data, and industry indicators are updated monthly.
A recent sample report on cement and concrete product manufacturing (NAICS 3273) included:
This information can help valuators determine not only current conditions but also trends and forecasts.
An industry profitability forecast for the cement and concrete product manufacturing industry.
In addition, industry profiles provide conversation starters organized by topic and by executive role. For example, questions in the cement industry report included: “How does the company compete in a commodity business where sales are based mostly on price?” and “How does the company manage cash flow fluctuations due to seasonal demand for cement and concrete?” These can prove useful for management interviews.
Valuators need detailed financial data and industry performance metrics to benchmark subject companies against industry peers. With the range of value between a weak company and a strong company in a marketplace often so wide, if you can pinpoint performance through benchmarking data, you can better substantiate your conclusion of value.
First Research incorporates financial benchmark information derived from MicroBilt data, including:
The reports also present benchmarks by company size, allowing valuators to compare a subject company against similarly sized businesses.
First Research provides financial benchmarks by company size, allowing a valuator to identify and analyze differences between a subject company’s results and industry reference points.
Business valuation requires assessing risk from both company-specific and industry perspectives. While valuators can get leads on the company’s risk factors from management and internal documents, among other sources, identifying industry risks often requires additional research.
First Research industry profiles devote significant attention to industry challenges, emerging issues, and competitive pressures. These sections can help valuators evaluate whether management’s projections are realistic and whether risk assumptions adequately reflect industry conditions.
For example, a report may identify concerns such as:
These insights, in turn, give a valuator critical context when assessing:
Even when additional research is warranted, having the major trends summarized in one place can significantly improve research efficiency.
First Research can’t replace your judgment, a guideline company search, or a deep dive into primary data. But for valuators who encounter unfamiliar industries, it’s a fast, credible way to get oriented, frame the right questions, and support the industry discussion in your report.
