Financiers: Analysts don't understand company basics

News Article - 13 December 2006
Category: Business

Around 16 per cent of senior finance workers believe analysts understand the basics of their company, a survey has shown.

The study, conducted by accounting company RSM International, also found that more than 80 per cent of European listed businesses did not think their performance was correctly reflected in their share price, Accountancy Age reports.

Some 190 responses from companies in eight countries, spanning 30 sectors and with a market capitalisation of €120 billion (£80.8 billion) were received as part of the study.

Almost a quarter of respondents said they thought analysts have poor or no knowledge of the business while fewer than 40 per cent had drawn up a strategy to enhance their market value.

RSM International's chairman, Chris Connor, said: Analysts are the ones who seem to have the biggest impact.

"I think the accountants need to help with the explanation of market value."

He indicated that auditors could spend more time with analysts to better understand business needs.

Accountants could help clients to understand the company's value and their role in shares on the market, he added.

RSM International has firms in financial centres and economies, represented by around 20,000 experts in more than 70 countries.

Article keywords: analysts, RSM International

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