NISM Certifications · NISM-Series-XV: Research Analyst · Company Analysis - Business and Governance
Which of the following is a qualitative factor an analyst would assess when judging the quality of a company's management?
An analyst judges management quality by qualitative factors such as the track record of capital allocation and how consistently management delivers against its stated guidance. Items like face value, split dates or trading days carry no information about managerial ability or integrity.
- ATrack record of capital allocation and consistency of execution against stated guidanceCorrect
- BThe company's face value per share
- CThe date of the last stock split only
- DThe number of trading days in a year
Explanation
Management quality is judged on integrity, capital allocation record, execution and communication consistency. Face value, a split date or trading days say nothing about managerial ability.
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