A quantitative analysis in simple words is a method or way of measuring things. In finance, quantitative analysis i.e. financial quantitative analysis means focusing on the financial data of an organization or an instrument to predict the future performance, the costs and the profits, the risks associated etc. These analysis are conducted by specifically educated professionals known as quantitative analysts, also referred to as quant or quant jockeys. The sample financial quantitative analysis provided below is a sample where the quant has analyzed a firm, presented the goals and future prospects of the organization.

Sample Financial Quantitative Analysis

Date of submission of analysis: 23rd February 2009

The financial quantitative analysis is being conducted by: Mr. James Morrison

Date of beginning of the analysis: 20th February 2009

Date of completion of the analysis: 23rd February 2009


Name of the organization: Campbell & Jennings Constructions

Nature of the financial quantitative analysis:

  • This analysis focuses on the utilization of all the resources by converting them into financial terms.
  • This analysis will be used to access the efficiency in the operation and conduct of the organization.

Parameters at the core of the analysis:

  • Return on invested assets
  • Return on Equity
  • Loss Reserve Ratio
  • Operating Ratio
  • Loss Adjustment Expenses (%)

Figures:

2005 2006 2007 2008 2009 Company Average Industry Average
Return on Invested Asset (%)     4.1       7.8     6.7    (8.2)     8.8            3.4            4.5
Return on Equity (%)     4.4     12.5     8.8  (27.8)   14.2            1.9            7.7
Return on Revenue (%)     4.8     14.7   10.7  (36.5)   21.7            2.4            7.9
Operating Ratio (%)   94.3     82.0   91.8     82.1 102.9          90.4          83.2
Loss Adjustment Expenses (%)   18.8     15.3   15.9     15.8   19.5          16.9          13.9

Observations and Suggestions:

  • The operating ratio measures the efficiency of the organization. The ratio has risen in 2009 and is higher than industry average implying inefficiency. The organization must take necessary steps to improve efficiency and increase margin between expenses and sales revenue.

Comments are closed.