Hi Strawpeople. I've been working on a qualitative analysis checklist for my personal investment process. I have tried to refine this list by only including questions which are important and knowable. The only section which doesn't really fit the important & knowable box is "5. Future/Outlook". However, with the market being future driven this is an important section, which I have attempted to make these generalized without requiring specific forecasts. I've grabbed a lot of these from other checklists I have seen or heard from various people.

Would love to hear some feedback on anything important that I may have missed / overlooked, or anything on the list that isn't important? See list below:-

1. Business

• What does the company do and is it easily understandable?

• What is the problem the company is solving and how are they solving it? - Where? Why does it need solving? 

• What is the company business model? What is the pathway from product/service/offering to payment? 

• Is the product offering diverse and therefore income generation diverse?

• Is the company a price maker or price taker?

• Does the business generate recurring revenues? How reliable is this recurring revenue? 

• Who are the core customers of the business?

• Is the customer base diverse?

• Is it easy to convince customers to buy the products/service?

• What is the customer retention rate?

• How long does it take for a company to recoup its customer acquisition costs?

• Does the company operate in multiple markets/countries?

• Does the company operate in stable markets?

• Is there a history of launching new lines of business successfully?

• Is the company disruptive and innovative in its field?  

• Are the profit margins attractive (better than industry)?

• What are the CAPEX requirements and are they ongoing?

• Has the business evolved for the better over time?

• Does the business have strong and supportive relationship over its suppliers?

• To what degree is the business cyclical?

• What extent does the business experience operating leverage?

• How does interest rate increase and inflation affect the business?

• Does the company spend a reasonable amount on R&D? Look at how R&D evolves over time in % of sales. 

• Is the company unknown or misunderstood by the market?

2. MOAT

• What are the barriers to entry for competitors?

• What is the competitive advantage the company has on its competitors? Is it strong and sustainable?

• Is the company the leader in its field?

• Are there any barriers to leave for customers, or switching costs (benefits for the customer improve over time, making it hard to leave)? 

• Could the business raise prices without losing customers?

• What is the degree of dependence the customers have on this business? If the business disappeared tomorrow, what impact would this have on its customer base?

• Does the company have Network effects (if the positive impact of market share gain compounds)?

• Does the company have intangible assets (e.g. a strong brand with consumer appeal)?

• Does the company have cost advantages (a lower cost structure or price point than competitors)?

• Is the company at an efficient scale (e.g. geographic dominance)? If not, is it on track to dominate the geographies/markets it operates in?

• Does the company have a distinguishable product, IP or patents to block competitors?

• Is the MOAT growing?

• How likely will the MOAT be intact in 10 years?

3. Management

• Could anybody run this business, or does it need extremely competent management?

• How is management remunerated? 

• What are the KPI’s for performance pay, are they long-term incentivized?

• Are stock options treated as an expense?

• Is the company founder/family led?

• Does the CEO and board have high insider ownership?

• Board of directors (BOD) relevant experience that complements each other?

• Does the management have a track record of meeting or over delivering on any guidance?

• Has the management shown in the past it can stick to and execute business goals?

• Does the management think and make decisions for the long-term?

• Passionate CEO or Founder with a proven track record in that industry?

• Has the management demonstrated a high degree of integrity (honesty)?

• Are the management enthusiastic about the business and its future?

• Are the managers clear and consistent with messaging to stakeholders? Is management candid with shareholders (evidence in the past of open disclosure to the shareholders when there have been problems)? 

• Has management resisted the temptation to grow quickly by merger & acquisition? 

• Has management resisted chasing institutional imperatives (avoid following current business and sector fads)?

• Does the management value its employees and ensure a good company culture?

4. Risks

• What are the main reasons this might not be a good investment? 

• What are the key risks the business faces?

• How competitive is the industry landscape? 

• Who are the main competitors?

• What are the competitors doing better than the company?

• Are company expenses managed well?

• What emerges if you research detractors of the company online? What do they point to?

• Do any of the management or board have a shady past or red flags?

• Have there been any related party transactions that seem odd?

• Is the auditor the company uses reputable?

• What is the likelihood this businesses product/service/offering becomes obsolete within the next 10 years?

• Invert. How could the management destroy value for shareholders, and how likely would it be for this to occur?

• How would this business be affected in a recession?

• Is there a risk of government regulation or restriction? 

• What could I be wrong about?

5. Future/Outlook

• Does the company have favourable long-term prospects? Will there be more need/demand for this company's products or services in 5 years’ time and why? 

• Are there opportunities for the company to expand its product/service range?

• Are there other markets the company could go into that would make sense (optionality of further growth prospects)?

• Is the TAM large and does the company have a long runway?

• Does the industry it operates in have headwinds (reducing need) or tailwinds (growing need)?

• What are the key growth drivers of the industry and the company?

• Does the management have a clear concise plan/strategy for the long-term future?

• Has the business demonstrated it is growing organically and will most likely continue?

• Is there a clear path to improved margins?

6. Tracking Company Progress?

• What are the company’s important trackable KPI’s? 

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b.

• Are there other aspects of the business, specific to the industry involved, which will give important clues as to how outstanding the company may be in relation to its competition?

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b.

7. When to Sell?

• What are my sell triggers? What occurrences would cause me to sell?

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b.