Analyze quarterly reports faster with Needl.ai

May 18, 2023

At the end of every quarter, financial analysts are posed with the same challenge - analyzing quarterly reports of the companies they are tracking. Financial analysts have to delve deep into the data and financial statements to analyze key metrics, evaluate financial ratios, assess trends, and identify strengths, weaknesses, opportunities, and threats (SWOT analysis).

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To understand the financial health of their portfolio companies, they have to:

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assess a company’s performance relative to industry benchmarks
extract meaningful insights and trends such as profitability, liquidity, and overall performance
provide recommendations or insights to stakeholders

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In this blog, we’ll dive deep into the challenges faced while analyzing quarterly reports and what analysts and investors can do to overcome them with Needl.ai.

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Challenges Faced While Analyzing Quarterly Reports

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Quarterly reporting season can be a challenging time for investors and analysts as a large volume of information streams all at once and they need to analyze and interpret all this financial data to make informed investment decisions. The sheer volume of information contained in these reports can be overwhelming, making it difficult for investors to identify key trends and assess a company's financial health.

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Given below are some common challenges financial/research analysts face when analyzing quarterly reports. These challenges can impact the accuracy and efficiency of their analysis:

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Data Complexity: Quarterly reports often contain a vast amount of financial data, including income statements, balance sheets, cash flow statements, and footnotes. Analyzing and understanding the intricacies of these complex financial statements can be time-consuming and require expertise in financial accounting.

Time Constraints: Financial/research analysts often face tight deadlines when analyzing quarterly reports. They need to review and interpret the data within a limited timeframe to provide timely insights and recommendations to stakeholders. Time constraints can add pressure and reduce the thoroughness of analysis.

Industry-Specific Challenges: Different industries have unique accounting practices, regulations, and reporting requirements. Financial/research analysts need to navigate these industry-specific challenges and understand the nuances when analyzing quarterly reports. It requires specialized knowledge and expertise in the respective industry.

Interpretation and Forecasting: Interpreting financial data and making accurate forecasts based on quarterly reports can be challenging. Analysts need to identify meaningful trends, assess the impact of external factors, and make reliable projections for future performance. This requires a deep understanding of the company's business model, industry dynamics, and economic factors.

Information Overload: With the increasing amount of data available, financial/research analysts can face information overload when analyzing quarterly reports. Sorting through vast quantities of data and identifying the most relevant insights can be overwhelming. It requires effective data management and analysis techniques to extract meaningful information.

Communication and Stakeholder Expectations: After conducting their analysis, financial/research analysts need to effectively communicate their findings and recommendations to stakeholders. They must present complex financial information in a clear and concise manner, ensuring that stakeholders understand the implications and can make informed decisions.

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Overcoming these challenges requires an Information Management System (IMS) that helps navigate a bulk of data. And, can adapt to the evolving nature of financial reporting to help analysts/investors easily extract accurate and valuable insights from quarterly reports.

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Needl.ai is such an IMS that makes this whole process simpler and more efficient with its AI capabilities so that you can analyze these reports in a hyper-personalized way, suited to your context.

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Easily Navigate Quarterly Reports with Needl.ai

Needl.ai makes this whole process simpler and more efficient with its AI capabilities so that you can analyze these reports in a hyper-personalized way, suited to your context.

It lets you cut out all the noise around the quarterly reports so that you can quickly find the information you are looking for when you need it. Needl.ai also lets you bring all other relevant information around the reports like news, personal chats, etc. in one place, making your analysis process organized, so that you can make more informed investment decisions.

6 ways how you can use Needl.ai to make your analysis better:

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1.Portfolio/Watchlist filter
You may want to look for updates for only the companies in your Portfolio and/or Watchlist. The Portfolio/Watchlist filter of Needl.ai lets you see all the updates from these companies with just one click so that you can cut out the noise which is not relevant to you.

To create your Portfolio/Watchlist in your Needl.ai account, upload a CSV of the companies or select all the companies one time from the provided list. You can also create multiple portfolios and watchlists depending on the nature of your work.

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2.Track a metric across a company’s filings

You can track any metric of a particular company for various quarters, without going through all the reports again and again. For example to see how NPA is changing for HDFC Bank QOQ, just search NPA in Exchanges in your Needl.ai account, and select HDFC Bank as the company.

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3.See what peers in a sector are saying in a given quarter

With Needl.ai, you can look for any particular information throughout the sector in one go. No need to go through the filings of every company and find a trend, just hit a search for the keyword, and that’s all. For example, to see what the management of different banks stated regarding NPA, just search NPA in Exchanges in your Needl.ai account, and select “Bank Nifty '' in the Indices filter.

4.Get automated Sentiment Analysis of earnings calls

Needl.ai provides you with sentiments of the whole earnings call, broken into each sentence. This helps sense the tone of the discussion and makes it easy to look out for management warnings, audit qualifications, and other updates.

You can also search within the sentiment analysis document to know the sentiment on any particular topic, or speaker.

To get a sentiment analysis file, just click on the “Sentiment analysis” button in front of any earnings call transcript.

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5.Convert tables and text in PDFs and images into editable files

You can convert all kinds of financial tables, and texts in the quarterly reports PDF to editable MS Excel and MS Word files in just one click. No need to manually create whole new tables and copy-paste important pieces of information.

Just open any document in Needl.ai, click on “Clip”, select the part you want to convert and click save.

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6.Create a personalized feed of reports and other updates

You may want to consume other information pertaining to the quarterly reports. Many projections, advice from industry experts you follow, the latest news, and much more. With Needl.ai, you can create personalized feeds based on keywords and sources and have all the information about any topic in a single place. Just click on Add feed in your Needl.ai account, type the keyword(s) you want to include and exclude, and select the sources. Make sure you have integrated all your preferred sources into Needl.ai before creating a feed.

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‍Conclusion

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In conclusion, quarterly reports are an essential source of information for investors, fund managers, and other financial market participants to track a company's financial performance and make informed investment decisions. However, analyzing the sheer volume of data contained in these reports can be challenging and time-consuming.

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Needl.ai offers a solution to simplify and streamline this process by providing AI-powered tools to help investors cut out the noise, track metrics across filings, monitor sentiment analysis, convert tables and text in PDFs into editable files, and create personalized feeds of reports and other updates. By leveraging Needl.ai's capabilities, investors can save time, make more informed investment decisions, and stay ahead of the competition.

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You can also check out this image to understand all the possibilities with Needl.ai in one place!