skills/full-company-analysis/references/appendices/Appendix-H-investment-memo-template.md

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<!-- Appendix: H | Title: INVESTMENT MEMO TEMPLATE -->

# APPENDIX H - INVESTMENT MEMO TEMPLATE

## Decision-relevant conclusion

State the analytical conclusion in three to five sentences. Separate business quality, expectations, valuation, and timing.

## Variant perception

What does the current price appear to require? Which evidence supports a materially different operating outcome?

## Evidence table

List each material claim, evidence type, primary source, date, confidence, and unresolved contradiction.

## Business economics

Customers, value proposition, pricing, unit economics, cost structure, capital intensity, reinvestment runway, bottlenecks.

## Industry and competition

Market size, value chain, share, substitutes, marginal price setter, cycle, disruption, regulation.

## Accounting and forensics

Material policies, normalizations, non-GAAP reconstruction, working capital, reserves, auditor/control issues, dilution.

## Forecast

Key operating drivers and why each assumption is reasonable. Show historical-to-forecast bridge and error ranges.

## Valuation

Base/bull/bear/stress values, methods, reverse expectations, EV-equity bridge, terminal assumptions, sensitivities.

## Catalysts and validation

Dated events or datapoints that should validate or falsify the thesis. Do not require a catalyst if value realization is long-duration, but define monitoring evidence.

## Risks and thesis breaks

Transmission mechanism, leading indicator, financial exposure, time horizon, mitigant, and explicit break condition.

## What changes the view

State the three most important future facts that would force a material model or thesis update.



## Required memo metadata

- Company, ticker, date/time, analyst, reviewer, market price, diluted share count, enterprise value, base-case value range, stated time horizon, and source cut-off time.

- Label every material statement as reported fact, management claim, analyst calculation, external estimate, or judgment. Link each material factual claim to the source log.

- State the decision question and the one variable that would most change the answer if the analyst is wrong.

## One-page front sheet

- Conclusion: three to five sentences, no chronology. State business quality, market-implied expectations, variant evidence, valuation range, and the principal reason the view could fail.

- Key numbers: historical revenue/FCF/ROIC, next-two-year driver forecast, base/bull/bear value, liquidity, dilution, and the three most decision-relevant KPIs.

- Variant table: market-implied assumption, analyst assumption, evidence, valuation sensitivity, validation date.

- Risk table: mechanism, earliest indicator, financial exposure, probability/range, thesis-break threshold.

## Mandatory exhibits

- Historical driver bridge and segment/KPI definition history.

- Integrated forecast summary with revenue, margins, FCF, balance-sheet/liquidity and share-count bridge.

- Valuation summary with DCF assumptions, relative normalization, reverse DCF, scenario matrix and EV-to-equity bridge.

- Capital allocation chronology and management forecast-accuracy record where decision-relevant.

- Disconfirming-evidence page containing the best bear argument, unresolved contradictions, and evidence that would force a thesis reset.

## Memo writing discipline

- Use numbers to answer a decision question, not to decorate prose. Every chart must make a relationship or divergence visible faster than text.

- Avoid adjectives such as strong, weak, attractive, conservative, or aggressive unless the memo defines the benchmark and quantifies the comparison.

- Do not repeat management language as analysis. Translate narrative into units, price, mix, margins, cash, capital, and time.

- Keep the decision layer concise and move raw evidence, detailed reconciliations, sensitivity tables, and source extracts to appendices.

## Illustrative conclusion pattern

> Example structure: "The current price requires approximately X years of Y growth and Z terminal margin. Our evidence supports a lower/higher path because A, B, and C. Under base assumptions the equity value range is $___ to $___, with the largest downside transmission through ___. The view should be reconsidered if ___ occurs by ___." Replace every placeholder with sourced numbers.

## Memo exit standard

A senior reviewer should be able to read the first page in under five minutes and identify the decision, market expectation, evidence edge, valuation, downside mechanism, and falsification trigger without opening the model.