Qualitative Assessment

Qualitative Assessment Skill

Purpose

This skill reads qualitative source documents (analyst reports, earnings call transcripts, press articles) and produces a structured assessment of three dimensions that directly feed into the DCF model assumptions:

1. Economic Moat — determines terminal growth rate and margin sustainability
2. EBITA Margin Outlook — adjusts Stage 2 margin assumptions (+/- pp)
3. Organic Growth Outlook — adjusts Stage 2 growth assumptions (+/- pp)

Without this skill, the Financial Modeling skill falls back to pure historical trend continuation, which misses forward-looking information.

Prerequisites

• The document must already be classified (Skill 1) — ticker, company name, and document type known
• The company's output_data/TICKER/ directory must already exist (i.e., at least one financial report has been processed)
• TICKER_metadata.md should exist with a Financial History table for context

Inputs

• Classified document in processing_data/ (analyst report, transcript, or article)
• output_data/TICKER/TICKER_metadata.md — for existing assessments to compare/harmonize

Outputs

• Updated TICKER_metadata.md with Qualitative Assessment section (new or harmonized with existing)

---

Step-by-Step Instructions

Step 1: Read the Source Document

Read the classified document from processing_data/. Identify:

• Source type: Analyst report, earnings transcript, press article, etc.
• Source date: Publication or earnings call date
• Author/firm: e.g., "Morningstar (Dan Romanoff, CPA)"

Also read the company's TICKER_metadata.md to check for any existing Qualitative Assessment.

Step 2: Assess Economic Moat

Determine the company's economic moat rating: Wide, Narrow, or None.

| Rating | Definition | Terminal Growth Implication | | ---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | | Wide | Structural advantages expected to sustain excess ROIC for 20+ years. Dominant network effects, high switching costs, or irreplaceable intangible assets. | Terminal growth = 4.0% | | Narrow | Clear competitive advantage, but likely to face erosion within 10-20 years. Currently outperforming cost of capital but not deep enough for long-term protection. | Terminal growth = 3.0% | | None | Highly commoditized or intensely competitive. No sustainable advantage. Short-term excess profits are quickly competed away. | Terminal growth = 2.5% |

For each moat rating, provide:

• Rating: Wide / Narrow / None
• Confidence: High / Medium / Low
• Source: Document name and date
• Three bullets of rationale — each should be specific, cite evidence from the document, and name the moat source (network effects, switching costs, intangible assets, cost advantage, or efficient scale)

> 💡 If the source document explicitly states a moat rating (e.g., Morningstar reports), use that rating and cite it. Your rationale should support or contextualize their assessment.

Step 3: Assess EBITA Margin Trajectory

Determine whether the company's EBITA margin will expand or shrink over the next 5 years, and by how much.

| Field | How to Determine | | -------------- | --------------------------------------- | | Direction | Expand / Shrink / Stable | | Magnitude | +/- 1-4 pp over 5 years (typical range) | | Confidence | High / Medium / Low |

For the three bullets of rationale, consider:

• Revenue mix shifts (high-margin vs. low-margin segments growing at different rates)
• Operating leverage (fixed costs being spread over growing revenue)
• Investment cycles (R&D, capex ramps that pressure near-term margins)
• Competitive pricing pressure
• Regulatory costs

> ⚠️ Be conservative. A +2 pp expansion over 5 years is significant. Moves larger than ±4 pp require very strong evidence.

Step 4: Assess Organic Growth Trajectory

Determine whether the company's organic revenue growth will increase or decrease relative to the current L4Q trend, and by how much.

| Field | How to Determine | | -------------- | --------------------------------------------- | | Direction | Increase / Decrease / Stable | | Magnitude | +/- 1-4 pp over 5 years relative to L4Q trend | | Confidence | High / Medium / Low |

For the three bullets of rationale, consider:

• TAM expansion or saturation
• New product launches and adoption curves
• Competitive dynamics and market share trends
• Macro/cyclical headwinds or tailwinds
• Management guidance and forward-looking commentary
• Base effects (easy or tough YoY comparisons)

Step 5: Harmonize with Existing Assessment

If TICKER_metadata.md already has a Qualitative Assessment section:

1. Compare each dimension (moat, margin, growth) with the existing assessment
2. If the new source agrees with the existing assessment: keep the existing, update the "Last updated" date and source
3. If the new source disagrees:

• Consider recency (more recent = more weight)
• Consider source quality (Morningstar analyst > news article)
• Consider confidence levels
• Update the assessment if the new evidence is stronger; otherwise keep existing and note the disagreement in a comment

Step 6: Write Output to Markdown

Write or update the following section in TICKER_metadata.md:

---

## Qualitative Assessment

_Last updated: {date} | Source: {source_description}_

### Economic Moat

| Field      | Value                  |
| ---------- | ---------------------- |
| Rating     | **{Wide/Narrow/None}** |
| Confidence | {High/Medium/Low}      |
| Source     | {source and date}      |

1. **{Moat Source 1}**: {specific evidence from the document}
2. **{Moat Source 2}**: {specific evidence}
3. **{Moat Source 3}**: {specific evidence}

### EBITA Margin Outlook

| Field      | Value                      |
| ---------- | -------------------------- |
| Direction  | **{Expand/Shrink/Stable}** |
| Magnitude  | {+/- N pp over 5 years}    |
| Confidence | {High/Medium/Low}          |

1. {Specific rationale with evidence}
2. {Specific rationale with evidence}
3. {Specific rationale with evidence}

### Organic Growth Outlook

| Field      | Value                          |
| ---------- | ------------------------------ |
| Direction  | **{Increase/Decrease/Stable}** |
| Magnitude  | {+/- N pp over 5 years}        |
| Confidence | {High/Medium/Low}              |

1. {Specific rationale with evidence}
2. {Specific rationale with evidence}
3. {Specific rationale with evidence}

Step 7: Move Source Document

Move the processed document from processing_data/ to output_data/TICKER/:

• Rename to remove the _temp suffix
• Both the PDF and the markdown file

---

How Downstream Skills Use This Output

The Financial Modeling assumptions skill (skills/financial_modeling/assumptions/) reads this section to adjust historical trends:

| Assessment | Downstream Effect | | ---------------------------------- | ----------------------------------------------------------------------- | | Economic Moat = Wide | Terminal growth 4.0%, terminal margin = Stage 2 margin (sustained) | | Economic Moat = Narrow | Terminal growth 3.0%, terminal margin converges toward industry average | | Economic Moat = None | Terminal growth 2.5%, terminal margin = industry average | | EBITA Margin: Expand +2 pp | Stage 2 margin = L4Q margin + 2 pp | | EBITA Margin: Shrink -2 pp | Stage 2 margin = L4Q margin - 2 pp | | Organic Growth: Increase +4 pp | Stage 2 growth = L4Q growth + 4 pp | | Organic Growth: Decrease -1 pp | Stage 2 growth = L4Q growth - 1 pp |

If no qualitative assessment exists, the assumptions skill defaults to Narrow moat behavior and pure historical continuation.

---

Important Notes

• Be specific, not generic. Every rationale bullet should cite evidence from the source document — numbers, quotes, product names, dates. Avoid vague statements like "strong brand" or "good management."
• Three bullets per dimension, no more. Forces prioritization of the most important factors.
• Magnitude matters. "+2 pp" and "+4 pp" produce very different DCF outcomes. Be precise and conservative.
• Confidence is about the evidence quality, not your personal certainty. A Morningstar deep-dive = High. A single news article = Low.
• The margin and growth outlooks are relative to the current L4Q trend, not absolute targets. If L4Q margin is 38% and you say "Expand +2 pp", the assumptions skill will set Stage 2 margin to 40%.

Reference

Based on extract_qualitative_assessment() in tiger-cafe/app/app_agents/qualitative_extractor.py, adapted from LLM-only assessment to document-grounded analysis.

Changelog

• 2026-05-06: Processed first FISV analyst report. Added FISV example and improved guidance on handling the first document for a new ticker.

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: Ruinius
• Source: Ruinius/financial-analyst-skills
• License: MIT

Install and usage instructions live in the source repository linked above.