GROUP 4

RODNEY T. NDLOVU L0237954J

BLESSED P. NKOMO L0237649S
JANET P. MBIVA L0238018B
BUSISILE R. NDEBELE L0237257J
NASHLEY MAKUFA L0237048R
JERRY MUSARIRI L0238219L
ASHTON N. ZUFUNZI L0237088H
 Valuation principles and practices

Fundamental analysis
Fundamental analysis is a comprehensive method of evaluating a company's intrinsic value by examining its
underlying financial, operational, and strategic factors. This approach helps investors, analysts, and portfolio
managers estimate a company's true worth and make informed investment decisions.
Types of fundamental analysis
1. Quantitative Analysis-this examines numerical data ( eg , financial ratios)
2. Qualitative Analysis-this evaluates non-numerical factors (eg, management quality.)

The fundamental analysis attempts to answer the following questions.

• is the company’s revenue growing?
• is it actually making a profit?
• is it in a position strong-enough to out run its competitors in the future?
• is it able to repay its debts?
• is management trying to "cook the books"
 Key components of fundamental analysis
• Financial Statements
Income Statement – this analyzes revenue, expenses, and profitability.
Balance Sheet- assesses assets, liabilities, and equity.
Cash Flow Statement- this evaluates cash inflows and outflows.
• Valuation Ratios
Price-to-Earnings (P/E) Ratio - Measures the price investors are willing to pay per dollar of earnings.
Price-to-Book (P/B) Ratio - Compares a company's market value to its book value.
Dividend Yield - Indicates how much a company pays out in dividends relative to its stock price.
• Economic Indicators
GDP Growth Rates - Reflects the economic health of a country.
Interest Rates - Influences borrowing costs and consumer spending.
Inflation Rates- Affects purchasing power and cost of living.
• Industry Analysis
Examines the competitive landscape, market trends, and regulatory environment.
Identifies key players and market share dynamics.
• Management Evaluation
Assesses the quality and track record of a company’s management team.
Considers leadership effectiveness, strategic vision, and corporate governance.
Principles of Fundamental Analysis
• Intrinsic Value Determination -The goal is to determine the true value of an asset, which may differ from its current
market price.
• Long-Term Perspective - Fundamental analysis often requires a long-term view, as market prices may deviate from
intrinsic values in the short term.
• Margin of Safety - Investors often seek a margin of safety, purchasing assets at a price significantly lower than their
calculated intrinsic value to minimize risk.
• Risk Assessment - Analysis must consider both market risk and specific risks associated with the asset or the industry.
• Continuous Monitoring - Fundamental analysis is not a one-time assessment; ongoing evaluation of financial health
and market conditions is essential.
Practical Steps in Conducting Fundamental Analysis
• Data Collection
Gather relevant financial statements and market data.
Utilize databases and financial news sources for comprehensive information.
• Financial Modeling
Build financial models to project future earnings and cash flows.
Use scenario analysis to evaluate different economic conditions and their impact on valuations.
• Conducting Sensitivity Analysis
Analyze how changes in key assumptions (e.g., growth rates, discount rates) affect the valuation outcome.
This helps in understanding the risks associated with the investment.
• Investment Thesis Development
Formulate a clear investment thesis based on the analysis.
Articulate the rationale for buying, holding, or selling the asset based on intrinsic value and market conditions.
Limitations of Fundamental Analysis
• Time-Consuming - Conducting thorough fundamental analysis can take considerable time and effort, which
may not be practical for all investors.
• Market Inefficiencies - In highly efficient markets, prices may reflect all available information, making it harder
to find undervalued assets.
• Subjectivity - Qualitative assessments can be subjective, leading to differing opinions on the value of an asset.
• Changing Conditions - Economic conditions and market dynamics can change rapidly, potentially invalidating
previous analyses.
 What is general economic analysis?

 It involves the examining of production , distribution , and

consumption of goods and services in an economy.
• It compasses a range of concepts and tools to understand
economic behavior , market dynamics ,and the effects of
polices .
 General economic influences
 Monetary policy
 Fiscal policy
 Political environment
 Budget deficit
 Exchange rates
 Interest rates and inflation rates
 Employment rates
 Tax regime
 How does the economic influences
affect the economy?
• Monetary policy-is the process by which a country ‘s central bank controls the supply of
money ,availability of credit and interest rate to achieve specific economic goals
• Fiscal policy – refers to the use of government spending and taxation to influence the
economy
• Exchange rates - this affects the value and return on investments denominated in foreign
currency. The stability of national currency against other foreign currencies is important.
• Political environment -A change in the political environment can substantially affect the
value of your investment and the return
• Employment rates –usually high unemployment rates are indicative poor economic
performance and are associated with recessions.
• Budget deficit – small deficits are deemed more desirable to huge deficit because a huge
budget deficit leads to excessive government borrowing which crowd out investors.
INDUSTRY ANALYSIS
 WHAT IS INDUSTRY ?
 combination of companies engaged in similar kinds of business activities.
Industries can be present in various categories like construction, manufacturing,
light, heavy, durable, non-durable, domestic, and foreign among others. Based on
this, automobile companies can be engaged in manufacturing, heavy and light
vehicles, and other categories.

 WHAT IS INDUSRTY ANALYSIS ?

 means assessing a market/industry to understand its competitive dynamics. It
helps investors understand a company’s position compared to its peers. It helps
gauge the overall attractiveness of the industry and the factors that determine a
company’s success

 Industry analysis tells what is happening in an industry in terms of demand-supply,

competition within the industry and with other industries, prospects considering
technological changes, and the influence of macroeconomic factors. All in all, it
helps identify opportunities and threats for a company in the current scenario and
future.
 This, in turn, gives you cues as to how well a company is positioned compared to
its peers now.
 Types of industry analysis
• There are three common types of industry analysis:
1.Porter’s Five Forces Analysis (Competitive Forces Model)
2. Broad Factors Analysis (PEST Analysis)
3.SWOT Analysis
 Porter’s Five Forces Analysis
(Competitive Forces Model)
This is one of the most famous models developed for industry analysis. It was introduced by Michael Porter in his book “Competitive
Strategy: Techniques for Analyzing Industries and Competitors” in 1980.
• According to Porter, there are five forces that help in doing accurate industry analysis. They are as follows:
• a. The level of competition in the industry
• Intense competition in an industry forces companies to battle against each other to gain dominance. Competitive battles can take
the form of anything from price wars to new products and advertising campaigns or an expanded product portfolio. Additionally,
government restrictions, labour union norms, and a lack of product/service differentiation also tend to intensify competition
among the companies. Together, these reduce the profit potential of the company in the industry.
• b. Threat of substitutes of products or services
• Most companies in an industry compete with each other as they produce substitute products. Such substitutes limit the earning
potential of the company when the industry imposes a ceiling on the prices. Substitution can be fought by product
differentiation.
• c. Bargaining power of buyers
• In an industry with more competitors and a single buyer constituting a large share of the market sales, the bargaining power lies
with customers. They are in a position to negotiate lower prices for better quality or ask for additional discounts. This can impact
the prices of products and services significantly.
• d. Bargaining power of suppliers
• A company enjoys bargaining power if the industry has only a few sellers/suppliers. If there are more suppliers, they have the
bargaining power and can quote prices, quality, and discounts according to their needs.
• For instance, the aviation industry has only two significant aero plane manufacturers—Airbus and Boeing. Thus, the bargaining
power of suppliers in the aviation industry is very high, and the companies can’t do much to negotiate favorable terms for
themselves.
 Porter’s Five Forces Analysis (Competitive
Forces Model

Barriers to entry
• This indicates the ease of entry into the industry. If it is easy to
enter the industry, companies constantly face the risk of new
competitors. As more companies enter, the availability of
substitute products limits the scope of increasing prices. If the
entry is difficult, the company with a competitive advantage
enjoys the benefits for a longer period.
• For instance, entry barriers in the aviation industry are high,
given it is an asset-heavy space and is subject to immense legal
and regulatory requirements. Therefore, any company that
enjoys a competitive advantage stand to benefit for a longer
 Broad Factors Analysis (PEST Analysis )
• Commonly called the PEST Analysis, this type of industry analysis evaluates the impact of Political,
Economic, Social and Technological factors on an industry. PEST analysis helps analyze the macro
environment in which the industry operates.
• Political factors include government policies and regulations relating to taxes, tariffs, environment,
labor laws, trade, ease of doing business, and overall political stability. Unfavorable policies can
adversely impact a company’s business. For instance, the increase in windfall taxes on oil companies will
most likely reduce their profits.
• Economic factors include inflation, interest rates, exchange rates, GDP growth rates, capital market
conditions, etc. In case the capital market conditions are not good, companies may find difficulty in
raising finance for their operations. This could hamper their growth.
• Social factors are the trends in society, like demographics, population growth, and behavior in terms of
health and fashion, etc. The young population in any area is bound to get older in a few years. If a
company is catering to the younger generation now, it will have to offer products for older generations in
a few years to stay relevant. If not, it will be forced to shut shop and relocate elsewhere.
• Technological factors are the developments that change the way a company operates and the way of
living life. For example, the advent of the internet. A washing machine company cannot survive if it
doesn’t offer innovative products and keep up with rivals in technologically-advanced times.
 SWOT analysis

• SWOT stands for Strengths, Weaknesses, Opportunities, and

Threats. SWOT analysis helps summarise various industry forces
and determine their impact on the company
 Importance of industry analysis
• Industry analysis helps an investor understand the market factors that tend to
impact the company in question. These factors can be the industry’s demand-
supply forces, demographics, competitiveness, entry and exit costs, and so on.
• Industrial analysis also helps understand if the industry has reached the
saturation point or if there is growth potential. If there’s no growth in the
industry, the company can also become saturated unless it ventures into
newer sub-industries.
• You can compare a company with its peers to understand how it is performing
versus them. Do this by comparing financial ratios and other key metrics of
the stock in question with the industry average (the average of all companies
in the industry/competitors).
 How to do industry analysis?
• Review information about the industry: You can find white papers, reports, analyses, research
reports, and presentations about the industry online and offline. Read these materials to get to know
the industry.
• Dissect the industry: Some industries like the real estate industry, can be huge, and have sub-
industries like residential properties, commercial properties, hotels, etc. So identifying the right sub-
industry is key to accurate analysis.
• Forecast the potential of the company’s growth: Try to gauge what the future demand and supply
in the industry look like. Additionally, assess the health of each company based on its growth rate and
product portfolio of the last 5 yrs. Then compare it with peers. You would come to know where the
company stands versus its rivals.
• Note the recent developments: Make a note of the recent developments within the industry and
how they have impacted or may impact the constituent companies presently and in the future.
 COMPANY ANALYSIS
WHAT IS COMPANY ANALYSIS
It is a common component of investment analysis, focusing on
evaluating a company’s financial health, operational efficiency and
market position to inform investment decision. It allows investors to
decide on the best companies to invest in, compare the intrinsic
value of stock to its market

Intrinsic value of stock

It is the perceived or calculated value of an asset ,based on
fundamental analysis, rather than its current market price
 STOCK TYPES

i. GROWTH STOCKS
These are shares in the companies that are expected to grow at an accelerated rate compared to
the broader market. They typically reinvest profits to fuel further expansion than paying dividends
They have high earnings growth rate typically exceeding 15% annually
They have strong revenue growth often driven by innovative products or services
They have high rate of return other than stocks with similar risk characteristics
ii DEFENSIVE STOCKS
Are shares whose rate of return does not decline or declines less than the overall market during
the period of overall market decline. They tend to be stable and less sensitive to economic cycles.
They have low volatility, they usually exhibit lower price volatility compared to more cyclical stocks
this means that their prices don’t fluctuate as dramatically, making them safer investment option
during market turbulence. They pay consistent dividends, this can provide reliable income steam
for investors.
Risk mitigation investors often turn to defensive stocks to hedge against market downturns, by
including these stocks in a portfolio investors can reduce overall risk and volatility
They are long term investment, defensive stocks are often viewed as long-term investments,
suitable for conservative investors seeking to preserve capital while still achieving modest growth
 iii Cyclical stock

It has changes in rate of return that is greater than changes in overall market rates of return. Their performance and stock prices are
closely tied to economic cycle
Characteristics
Economic sensitivity- cyclical stocks typically belong to industries that experience significant fluctuations in demand based on economic
conditions. When the economic is booming, these companies usually see increased sales and profits; during downturns, their
performance tends to suffer. Industry common sectors for cyclical stocks include consumer discretionary, companies that sell non-
essential goods and services , such as automobiles, luxury items, and entertainment (e.g ford Nike,)
High volatility-the stock prices of cyclical companies can be quite volatile, reflecting broader economic trends. Investors
may see significant price swings based on economic indicators such as GDP growth, employment rates and consumer
confidence.
iv SPECULATIVE STOCK
Refers to a share in a company that carries a high level of risk due to its potential for significant price volatility and
uncertainty regarding its future performance. They often come from companies that are new, unproven or early stages of
development, making it difficult to predict their future earnings.

GROWTH COMPANY
Is the firm the management’s ability and the opportunity to make investments that yield rate of return greater than required
rate of return

SWOT ANALYSIS
It identifies company’s internal strengths and weaknesses as well as opportunities and threats.
Strength- this are internal attributes that give company advantage e.g strong brand and proprietary technology
Weaknesses-internal weaknesses that may hinder performance eg high debt levels or lack of skilled personnel
Opportunities- are external factors that the company could capitalize on eg emerging markets, regulatory charges favoring
the industry
Threats-external challenges that could negatively impact the company eg increased competition, economic downturns
 VALUATION APPROACHES

a. Present value of cashflow approach

Is the fundamental method used in company valuation particularly in the context of discounted cash flow analysis. Cashflows these are
the expected future cash inflows and outflows that a company will generate. In valuation ,we often focus on free cash flows, which are
the cash available to investors after all operating expenses and capital expenditures have been paid. It includes present value of
dividends, present value of free cash flow and present value of operating cash flow to the firm
Free cash flow=net income+ depreciation+ amortization-change in working capital-capital expenditure
It considers time value of money
Steps in the PVCF approach
a. Project future cash flows
b. Discount cashflow to present value=CF\(1+r)^n
EXAMPLE
You are considering an investment project that requires initial investment of $100000, The project is expected to generate cashflow over
the next 5 years as follows
Year1 :25000
Year2 :30000
Year3 :35000
Year4 :40000
Year5 :45000
The required rate of return (discount rate) for investment is 10%
Calculations
Present value of cashflows=25000/(1+0,10)^1+30000/(1+0,10)^2+35000/(1+0,10)^3+40000/(1+0,10)^4+45000/(1+0,10)^5
Add the total present value of cash flows
Calculate Net present value=total PV-initial
 RELATIVE VALUATION TECHNIQUE
This technique is commonly used in company valuation to assess a firm’s worth by comparing it to similar companies or benchmarks. It
includes the use of valuation multiples ,these are ratios that relate a company’s market value to some measure of its financial
performance. These include price to earnings ratio, price to sales ratio, price to cashflow ratios and price to book value ratio
Price to cashflow ratio
Is a financial metric used to evaluate the valuation of company’s stock relative to its cashflow. It is particularly useful for assessing
companies that may have high earnings volatility or non-cash expenses, as it focuses on cash flow rather than accounting profits
Calculation
p/cf ratio=market price per share /cashflow per share
Market price per share =current trading price of the company’s stock
Cashflow per share=operating cashflow /number of outstanding shares
Interpretation
Lower p/cf ratio =undervaluation of stock, or the company has strong cash flows compared to its price
Higher p/cf ratio=stock overvalued or the company has weaker cash flows compare to its price
Limitations
Can be affected by fluctuations
it may not be as effective for companies with significant non-cash items
EXAMPLE
A company A, a leading retailer, has a current market price of $50/share, its trailing 12 month operating cash flows $5/share, the industry
average P/CF ratio is 10x. Calculate the relative valuation of company A using the P/CF ratio and determine if its undervalued or
overvalued or fairly valued compared to its industry peers
Calculations
Calculate company A P/CF ratio ; $50/$5=10x
Compare company A’S P/CF ratio to the industry average :10x(company A)= 10x (industry average) It is fairly valued
 PRICE TO BOOK VALUE RATIO
Is a financial metric used to evaluate a company’s market value relative to its book value. It helps investors to determine if stock is
overvalued or undervalued based on its net asset value.
CALCULATION
P/B Ratio=market price per share/book value per share
Market price per share is current trading price of company’s stock
Book value per share= (Total assets –total liabilities)/number of outstanding shares
P/B<1=Stock is undervalued, market price is less than company book value
P/B ratio >1=stock overvalued or investors expect strong future growth
P/B ratio=1 market value equals book value, stock is fairly valued
Strengths
Value investing-investors often use P/B ratio to identify potentially undervalued stocks ,particularly in asset-heavy industries such as
manufacturing or real estate.
Comparative analysis- the P/B ratio is useful for comparing companies within the same industry
Limitations
Not meaningful for companies with significant intangible assets like( tech firms) or those that operate in industries where tangible assets
are less critical
Does not account for future growth potential or earnings which may be vital in assessing a company’s overall value
EXAMPLE
Company XYZ Inc has a market price:$50 per share ,total shareholders’ equity (Book Value):$30per share
Number of shares outstanding ;1 million shares
Price to book value ratio=$50/$30
=1,67x
The P/B ratio of 1,67x indicates that investors are willing to pay 1,67 for every $1 of book value this suggest that the market values the
company’s assets and earnings potential at premium
 PRICETO SALES RATIO
It is a financial metric that evaluates a company’s market value relative to its total sales or
revenue.
Calculation
P/S Ratio=market capitalization/total revenue
On per share basis
P/S Ratio=market price per share/revenue per share
Market capitalization is the total ,market value of a company’s outstanding shares
EXAMPLE
Company ABC Inc has current price $100/share
Revenue =$1 billion
Number of shares outstanding 10 million shares
Answer
($100*10000000)/$1 billion
=1x
This indicate that investors are willing $1 for every $1 of sales
 PRICE TO EARNINGS RATIO
Is a widely used financial metric that helps investors assess a company’s valuation relative to its earnings
It indicates how much investors are willing to pay for each dollar of earnings, providing insight into market
expectations regarding future growth
P/E ratio=market price per share /earnings per share
Market price per share =current trading price of company’s stock
Earnings per share =company’s net income/number of outstanding share
Types of P/E ratio
Trailing P/E –based from the last 12 months
Forward P/E-based on projected earnings for the next 12 months
High P/E ratio=stock overvalued or investors are expecting high growth rates
Low P/E ratio=stock is undervalued or company is experiencing some challenges
Strengths
Valuation assessment- investors use P/E to compare companies within the same sector
Growth vs investing-growth investors often look for higher P/E ratios while value investors seek lower P/E
ratios as potential bargains
Limitations
P/E does not account for differences in growth rates between companies
May not be meaningful for companies with negative earnings
Company XYZ Inc has current market price $80/share, earnings per share $4
$80/$4=20x
 What is asset
allocation
Asset allocation refers to an investment strategy in which individuals
divide their investment portfolios between different diverse asset classes
to minimize investment risks. The asset classes fall into three broad
categories: equities, fixed-income, and cash and equivalents. Anything
outside these three categories (e.g., real estate, commodities, art) is often
referred to as alternative assets.
 Asset classification
• Equities also known as stock or share representing
ownership in companies
• Fixed income refers to investment that provide regular,
predictable income payment eg interest and dividends
• Cash and cash equivalents are liquid assets easily
convertible to cash within a short period
 Why Asset Allocation
Risk Management: Spreading investments across asset classes reduces exposure to any one
particular market or sector.
Diversification: Allocating assets to different classes helps mitigate losses in one area with
gains in another.
Return Optimization: Combining assets with varying returns helps achieve a balanced portfolio.
Volatility Reduction: Asset allocation can reduce portfolio fluctuations.
Long-term Focus: Encourages investors to prioritize long-term goals over short-term market
fluctuations.
Tax Efficiency: Allocating assets strategically can minimize tax liabilities.
• Inflation Protection: Including inflation-resistant assets (e.g., real estate, commodities) helps
maintain purchasing power.
 Long-term
strategic asset
allocation
 Long-term strategic asset
allocation
Long-term strategic asset allocation is a level of asset allocation that involves
dividing an investment portfolio among different asset classes (e.g., stocks,
bonds, real estate) based on an investor's goals, risk tolerance, and
investment horizon. This approach focuses on optimizing portfolio
performance over the long term, typically 10 to 15years.
Key Characteristics
• Investors Risk Tolerance
• Investors Long term goals e.g Wealth accumilation
• Time Horizon. Long-term focus of exected returns
• Diversification. Spreading unsystematic risk across different asset classes
 Strategic Asset Allocation
Process
• Investor profiling: Assess goals, risk tolerance, and investment horizon, this
increases potential for long term growth.
• Asset class selection: Choose suitable asset classes is key to reduce risk through
diversification
• Allocation determination: Assign percentage weights to each asset class and
encourage disciplined investment approach
• Portfolio construction: Implement allocation using specific securities that align
with investors goals and risk tolerance
• Monitoring and rebalancing: Periodically review and adjust allocation preferably
after 5 years which in turn enhance portfolio resilience
 Example of Long-term strategic
asset allocation
• Conservative Investor (60% fixed income, 30% equities, 10% alternatives)
• Moderate Investor (40% fixed income, 50% equities, 10% alternatives)
• Aggressive Investor (20% fixed income, 70% equities, 10% alternatives)
Challenges Faced
• Market fluctuations
• Changing investor circumstances
• Asset class performance variability
• Rebalancing decisions
• Tax implications
Fundamental-
driven asset
allocation
 Fundamental-driven Asset
allocation level
• Fundamental-driven asset allocation is an investment strategy that allocates assets based
on fundamental analysis of economic and market factors. This approach focuses on
identifying undervalued or overvalued asset classes and adjusting allocations accordingly.
Key Characteristics
• Fundamental analysis: Examines economic, market, and company-specific factors
• Active management: Regularly adjusts allocations based on changing market conditions
• Valuation-driven: Seeks undervalued assets with potential for growth
• Macro-economic focus: Considers inflation, interest rates, GDP growth, and other
economic indicators
• Bottom-up approach: Analyzes individual companies or sectors within asset classes
Fundamental Analysis Factors
• Economic indicators (GDP growth, inflation, unemployment)
• Monetary policy (interest rates, quantitative easing)
• Fiscal policy (government spending, taxation)
• Market sentiment (investor confidence, risk appetite)
• Company-specific factors (earnings growth, dividend yield)
Asset Allocation Process:
• Macro-economic analysis: Identify trends and outlook
• Asset class valuation: Assess relative value across asset classes
• Sector and company analysis: Identify undervalued opportunities
• Portfolio construction: Allocate assets based on fundamental
analysis
• Ongoing monitoring: Adjust allocations as market conditions
change
Example Allocation:
• Stocks: 60% (30% US equities, 30% international
equities)
• Bonds: 20% (10% government bonds, 10% corporate
bonds)
• Alternatives: 20% (10% real estate, 10% commodities)
Benefits:
• Potential for higher returns through active management
• Risk management through diversification and hedging
• Adaptability to changing market conditions
• Focus on underlying value rather than market sentiment
Challenges:
• Complexity: Requires in-depth knowledge of economics,
markets, and companies
• Subjectivity: Fundamental analysis involves judgment calls
• Timing risks: Incorrect market timing can impact
performance
• Higher costs: Active management may incur higher fees
Tactical Asset
allocation
 Tactical Asset allocation
• Tactical Asset Allocation (TAA) is an active investment strategy
that involves adjusting a portfolio's asset mix to capitalize on
short-term market opportunities or mitigate potential losses.
Key Characteristics:
• Active management
• Short-term focus (quarterly or monthly)
• Opportunistic
• Risk management
TAA Process:
• Market analysis: Identify trends, opportunities, and risks.
• Asset class evaluation: Assess attractiveness of each asset class.
• Allocation decision: Adjust allocations based on market analysis.
• Portfolio rebalancing: Implement allocation changes.
TAA Strategies:
• Momentum-based: Adjusts allocations based on market
momentum.
• Mean-reversion: Exploits market inefficiencies through
contrarian investing.
• Macro-economic: Adjusts allocations based on macro-economic
indicators.
• Technical analysis: Uses charts and technical indicators to inform
allocation decisions
Example Allocation:
• - Stocks: 50% (30% US, 20% international)
• - Bonds: 30% (20% government, 10% corporate)
• - Alternatives: 20% (10% real estate, 10% commodities)
Tactical Adjustment:
• Increase stocks to 60% due to improving economic
indicators.
• Decrease bonds to 20% due to rising interest rates.
Benefits:
• 1. Potential for higher returns through active management.
• 2. Improved risk management through dynamic asset
allocation.
• 3. Enhanced adaptability to changing market conditions.
• 4. Opportunities for alpha generation.
Challenges:
• Market timing risks: Incorrect allocation decisions can impact
performance.
• Increased costs: Active management may incur higher fees.
• Complexity: Requires sophisticated analysis and expertise.
• Emotional decision-making: Can lead to impulsive allocation
decisions.