| name | Qualitative Assessment |
| description | Assess a company's economic moat, EBITA margin trajectory, and organic growth trajectory from analyst reports, earnings transcripts, or long-form articles. Produces structured qualitative outlook that feeds into the Financial Modeling skill's assumption generation. |
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:
- Economic Moat — determines terminal growth rate and margin sustainability
- EBITA Margin Outlook — adjusts Stage 2 margin assumptions (+/- pp)
- 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:
- Compare each dimension (moat, margin, growth) with the existing assessment
- If the new source agrees with the existing assessment: keep the existing, update the "Last updated" date and source
- 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.
