Introduction: Corporate Analysis Method Using IR Information
You may have not heard of “IR information” before.
IR stands for Investor Relations, and with this, you can find out information such as: if the company is stable, if it will go bankrupt or not, if it will grow in the future, and more.
On top of that, Not many students use IR information when looking for a job. So if you use it, you’ll be able to collect information that other students don’t have.
When telling a company why you applied, you can use this information to stand out from other applicants.
What you have to do is quite simple. I’ll tell you the easiest way to collect information so you can use it from now on.
4 Things That You Should Know About the Annual Securities Report
Here are the four items I’ll cover today
- IR information - What is an annual securities report?
- Check a company’s current business situation
- Check problems to be addressed and risks in business
- Check employees’ information
Let's take a look at them one by one.
IR Information - Annual Securities Report
IR information refers to all information published by listed companies for investors.
Today I’ll talk about one kind of IR information, "Annual securities report”, which is a report on the management and financial status of companies.
An annual securities report can be found on the "Investor Information/IR Information" page on a listed company’s website. Now, let me explain how to find a list of annual securities reports using the electronic disclosure system "EDINET" of the Financial Services Agency (FSA).
Go to EDINET’s website by entering "EDINET" into your search engine.
First, click the "Document Search" tab. Then, enter the company name in the box for "Submitter/Issuer/Fund."
Next, check the "Annual Securities Report" box for "Type of document," then click the search button.
The search results will be displayed below, so click on the securities report for the most recent fiscal year.
In general, Annual Securities Reports are only written in Japanese, but some companies also publish English versions.
Here is a link to English translations of Annual Securities Reports (ASRs) on EDINET.
So, company information is collected on the website named EDINET...
By the way, some companies’ annual securities report can be hundreds of pages long.
You said this should be the "easy" way, didn’t you?
You lied to me, sensei!
Well, you don't have to read all the pages!
There are only three items you have to check out!
If there are only three, I think I can handle that!
So, what are the 3 items?
- Overview of Business 【事業の状況】
- Business Risks 【事業等のリスク】
- Employees 【従業員の状況】
These items are written in sentences so you don’t have to read difficult numbers in financial statements such as balance sheets or income statements. You can easily do corporate research even when you’re on the train.
Okay then, let's dive into the first item!
1. Overview of Business
Here’s an example of an overview of the business. I picked NTT docomo because they publish reports in both Japanese and English.
In this item, the situation of the company and/or the situation of its industry is briefly described. In response to the current business situation, what kind of policy is going to be implemented, what fields the company will concentrate on, and what direction the company is heading are mentioned here.
You can check if what you want to do matches the direction the company is heading.
Now, let's move on to the next item.
2. Business Risks
In this item, the current challenges companies face and future risks are described.
By understanding the issues and risks, you can figure out weaknesses and future measures of the company.
You may be asked questions such as "What do you think are the weaknesses of our company?" in your interview. If you have checked this in advance, you can provide accurate answers.
It is crucial to know the company's issues and risks when choosing a company, so be sure to check these out.
That'd be a vital element I think.
If you join the company, the issues will be yours either directly or indirectly.
Now I hope you know that you should definitely read this item.
There is a chance that even a large corporation might not be doing well.
Let's move on to the third item.
The third item is “Employees."
In this item, you can find information such as the number of employees, average annual income, and average years of service in each sector.
You may be able to check the average annual income and average years of service by googling these words. By using the IR information on the number of employees in each sector as well as the fields that the company is going to concentrate in, you can extrapolate where you’ll most likely be working.
At a company’s information session, even if they mention a certain sector they will focus on, there might be cases where there are actually few personnel assigned to that sector.
Then, if you could discover that fact from the annual securities report, it’s also a good idea to ask about it to get more specific information at OB/OG visits (visit alumni of your school) or a job fair.
I learned that the amount of information I have can affect the quality of my questions.
Corporate analysis using IR information is highly recommended for conducting corporate research to differentiate yourself from rivals.
The three items discussed today are very important, yet quite easy to access. Basically all companies use the same format in annual securities reports, which helps you effectively do a comparative analysis of other companies in the same industry.
So, please try it out!