Intro:
I recently faced challenges producing flawless analytical work. Below, I will describe the task and why I struggled. Ultimately, it came down to a lack of precision and organization.
I would like to hear from any current professionals about the systems they have developed to avoid making mistakes and consistently produce flawless analytical work.
Task:
I was tasked with producing brief company profiles of two potential buyers. Each profile included a PV chart, capitalization summary, historical and projected financials, and industry-specific key items (e.g., REVPAR for hotels).
Sources of Information:
My first challenge was having too many sources.
- FactSet for actuals and projections in CAD
- FactSet for actuals and projections in USD
- Company filings for historicals in USD
- FactSet converts at the historical FX rate and I was told to convert everything using the spot rate, so I also had an Excel open where I was multiplying numbers from the filings by today's rate
- Equity research reports for projections
Documents:
I had separate Excel workbooks for:
- Doing calculations
- Copying over FactSet downloads
- Exporting outputs to PowerPoint
Outcome:
Between having too many sources of truth and various workbooks, something had to give. Ultimately, I pulled a Balance Sheet summary from FactSet for historical Total Debt and it did not tie into the Total Debt in the Market Cap to the EV bridge. I later discovered that was because FactSet included lease liabilities in the calculation (whereas management did not in their MD&A).
Final Thoughts:
Miscalculating total debt was a blunder. I suspect it happened because I had too many sources of information and a disorganized workflow.
I would greatly appreciate it if anyone could detail their workflow system (anything repeatable, like always hitting F7 or printing out for review before submitting).
Any commentary on how to approach such a task would be great (e.g., which sources to trust, how to error-proof, order of operations like what to read first, suggestions for speed/efficiency).
Thanks in advance.
Are you an engineer? There is no way to have a perfect catch all system every time. You get better by pattern recognizing your mistakes so your natural cognition remembers not to do that again.
If you’re miscalculating items and not catching them it’s not because you have “too many sources” - it’s because you don’t know what that formula means and so therefore you couldn’t catch your own mistake before someone who breathes that number in their sleep does.
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