Initiating Coverage

Initiating Coverage

Create institutional-quality equity research initiation reports through a structured 5-task workflow. Each task must be executed separately with verified inputs.

Overview

This skill produces comprehensive first-time coverage reports following institutional standards (JPMorgan, Goldman Sachs, Morgan Stanley format). Tasks are executed individually, each verifying prerequisites before proceeding.

Default Font: Times New Roman throughout all documents (unless user specifies otherwise).

⚠️ CRITICAL: One Task at a Time

THIS SKILL OPERATES IN SINGLE-TASK MODE ONLY.

If User Requests Full Pipeline

When user requests:

• "Create a coverage initiation report for [Company]"
• "Write an initiation report for [Company]"
• "Do the entire equity research process for [Company]"
• "Complete all 5 tasks for [Company]"
• Any request that implies running multiple tasks or the entire workflow

REQUIRED RESPONSE:

1. Ask which specific task to perform:

   I can help you create an equity research initiation report for [Company].
   This involves 5 separate tasks that need to be completed individually:
   
   1. Company Research - Research business, management, industry
   2. Financial Modeling - Build projection model
   3. Valuation Analysis - DCF and comparable companies
   4. Chart Generation - Create 25-35 charts
   5. Report Assembly - Compile final report
   
   Which task would you like to start with?

2. When user explicitly requests all tasks together:

   I understand you'd like to complete the entire initiation report pipeline.
   Currently, this skill supports executing one task at a time, which allows
   for better quality control and review at each stage.
   
   We're working on a seamless end-to-end workflow that will make this process
   more automated, but for now, we'll need to complete each task separately.
   
   Would you like to start with Task 1 (Company Research)?

3. Never automatically assume which task to start - always ask user to confirm.

4. Never execute multiple tasks in sequence - complete one task, deliver outputs, then wait for next user request.

Task Execution Rules

• ✅ Execute exactly ONE task per user request
• ✅ Always verify prerequisites before starting a task
• ✅ Deliver task outputs and confirm completion
• ✅ Wait for user to explicitly request the next task
• ❌ Never chain multiple tasks together automatically
• ❌ Never assume user wants to proceed to next task
• ❌ Never execute Tasks 3-5 without verifying required inputs exist

⚠️ Deliverables Policy: NO SHORTCUTS

DELIVER ONLY THE SPECIFIED OUTPUTS. DO NOT CREATE EXTRA DOCUMENTS.

Each task specifies exact deliverables. Do NOT create:

• ❌ "Completion summaries"
• ❌ "Executive summaries"
• ❌ "Quick reference guides"
• ❌ "Next steps documents"
• ❌ "Task completion reports"
• ❌ Any other "helpful" documentation not explicitly specified

Why: These extras waste context and are not part of the professional workflow.

What TO deliver:

• ✅ Task 1: Research document (.md) — NOTHING ELSE
• ✅ Task 2: Financial model (.xlsx) — NOTHING ELSE
• ✅ Task 3: Valuation analysis (.md) + Excel tabs added to Task 2 file — NOTHING ELSE
• ✅ Task 4: Charts zip file (.zip) — NOTHING ELSE
• ✅ Task 5: Final report (.docx) — NOTHING ELSE

If a deliverable is not listed above, DO NOT CREATE IT.

Task Selection

Select which task to execute:

How to Use This Skill

User Request Patterns and Responses

Pattern 1: User specifies a specific task

User: "Use initiating-coverage, Task 1 for Tesla"
Response: ✅ Execute Task 1 immediately

Pattern 2: User asks for "initiation report" or "full pipeline"

User: "Create a coverage initiation report for Tesla"
Response: ❌ DO NOT start any task automatically
         ✅ Ask which task to start with (see template above)

Pattern 3: User wants to do "all tasks" or "entire workflow"

User: "I want to complete all 5 tasks for Tesla"
Response: ❌ DO NOT chain tasks together
         ✅ Explain one-at-a-time limitation (see template above)
         ✅ Ask if they want to start with Task 1

Correct Usage Examples

Executing a single task:

"Use initiating-coverage skill, Task 1 for Tesla"
"Do Task 2 of initiating-coverage for Tesla"
"Run Task 3 for Tesla using the initiating-coverage skill"

Completing full report (requires 5 separate requests):

Request 1: "Do Task 1 for Tesla" → Complete → Deliver outputs
Request 2: "Do Task 2 for Tesla" → Complete → Deliver outputs
Request 3: "Do Task 3 for Tesla" → Complete → Deliver outputs
Request 4: "Do Task 4 for Tesla" → Complete → Deliver outputs
Request 5: "Do Task 5 for Tesla" → Complete → Deliver outputs

Task Execution Order

For a complete initiation report, tasks must be executed in separate user requests following this order:

Request 1: Task 1 - Company Research (independent)
           ↓ [User reviews outputs and requests next task]
Request 2: Task 2 - Financial Modeling (independent)
           ↓ [User reviews outputs and requests next task]
Request 3: Task 3 - Valuation Analysis (requires Task 2 output)
           ↓ [User reviews outputs and requests next task]
Request 4: Task 4 - Chart Generation (requires Tasks 2 & 3 outputs)
           ↓ [User reviews outputs and requests next task]
Request 5: Task 5 - Report Assembly (requires ALL previous task outputs)

Note: Tasks 1 and 2 can be run in any order. Tasks 3-5 have strict dependencies and must verify inputs before proceeding.

Task 1: Company Research

Purpose: Research company's business, management, competitive position, industry, and risks.

Prerequisites: ✅ None (fully independent)

• Company name or ticker symbol

Process:

1. Verify company name/ticker provided
2. Load detailed instructions from references/task1-company-research.md
3. Execute qualitative research workflow
4. Deliver research document

Output: Company Research Document (6,000-8,000 words)

• Company overview & history
• Management bios (300-400 words × 3-4 execs)
• Products & services analysis
• Industry overview
• Competitive analysis (5-10 competitors)
• TAM sizing
• Risk assessment (8-12 risks)

File name: [Company]_Research_Document_[Date].md

⚠️ DELIVER ONLY THIS 1 FILE. NO completion summaries, no extra documents.

⚠️ DO NOT TAKE SHORTCUTS:

• ✅ Write full 6,000-8,000 words (not summaries)
• ✅ Complete 300-400 word bios for ALL 3-4 executives
• ✅ Analyze ALL 5-10 competitors thoroughly
• ✅ Cover all 8-12 risks across 4 categories
• ❌ Do not abbreviate sections to save time
• ❌ Do not skip any required sections

Verification before proceeding: None required for this task.

Task 2: Financial Modeling

Purpose: Extract historical financials and build comprehensive Excel financial model with projections and scenarios.

Prerequisites: ⚠️ Verify before starting

• Required: Access to company financial data
  • For public companies: Latest 10-K from SEC EDGAR
  • For private companies: Financial statements or available estimates
  • OR: Pre-extracted historical financials provided by user
• Optional: Company research (Task 1) for business context

Input Verification:

BEFORE STARTING - Select approach:

Option A: Extract financials (most common)
- [ ] Have access to 10-K or financial statements?
- [ ] Ready to extract 3-5 years of data?

Option B: User provided pre-extracted financials
- [ ] Historical financials file received?
- [ ] Contains income statement, cash flow, balance sheet (3-5 years)?

Optional:
- [ ] Company research (Task 1) complete for context?

Process:

1. Verify access to financial data
2. Load detailed instructions from references/task2-financial-modeling.md
3. Step 1: Extract historical financials (if needed)
4. Step 2+: Build projection model with 6 essential tabs
5. Deliver Excel model

Output: Excel Financial Model (.xlsx)

• 6 essential tabs:
  1. Revenue Model - Product breakdown (20-30 rows) + Geography breakdown (15-20 rows)
  2. Income Statement - Full P&L with 40-50 line items, historical (3-5 years) + projected (5 years)
  3. Cash Flow Statement - Operating/Investing/Financing activities, historical + projected
  4. Balance Sheet - Assets/Liabilities/Equity, historical + projected
  5. Scenarios - Bull/Base/Bear comparison table
  6. DCF Inputs - Prepared for Task 3 valuation

File name: [Company]_Financial_Model_[Date].xlsx

⚠️ DELIVER ONLY THIS 1 FILE. NO completion summaries, no extra documents.

⚠️ DO NOT TAKE SHORTCUTS:

• ✅ If extracting financials: Extract ALL line items from 3 financial statements (3-5 years)
• ✅ Build ALL 6 projection tabs completely with full detail
• ✅ Create detailed revenue model with 20-30 product rows AND 15-20 geography rows
• ✅ Build complete income statement with 40-50 line items (not abbreviated)
• ✅ Include full cash flow statement and balance sheet with all line items
• ✅ Complete ALL three scenarios (Bull/Base/Bear) with different parameters
• ❌ Do not create simplified/abbreviated versions
• ❌ Do not skip any of the 6 essential tabs
• ❌ Do not skip historical financials extraction if needed

Verification before proceeding to Task 3:

• Historical financials extracted (if needed) or provided
• Excel file created and can be opened
• Model has all 6 essential tabs (Revenue Model, Income Statement, Cash Flow, Balance Sheet, Scenarios, DCF Inputs)
• Historical data (3-5 years) incorporated
• Projections complete (5 years forward)
• Scenarios complete (Bull/Base/Bear)

Task 3: Valuation Analysis

Purpose: Perform comprehensive valuation using DCF, comparables, and precedent transactions.

Prerequisites: ⚠️ Verify before starting

• Required: Financial model from Task 2
  • Projected income statements
  • Projected cash flows
  • Revenue and EBITDA forecasts
  • DCF inputs (unlevered FCF)

⚠️ CRITICAL: DO NOT START THIS TASK UNLESS TASK 2 IS COMPLETE

This task requires the financial model from Task 2. Starting without it will result in incomplete work.

IF TASK 2 IS NOT COMPLETE: Stop immediately and inform the user that Task 2 (Financial Modeling) must be completed first. Do not attempt to proceed or create placeholder valuations.

Input Verification:

BEFORE STARTING:
- [ ] Task 2 complete? (Financial model exists)
- [ ] Model file path/location known?
- [ ] Can access projected financials from model?

Required from model:
- [ ] Projected FCF (5 years)
- [ ] Revenue projections
- [ ] EBITDA projections
- [ ] Terminal year metrics

Process:

1. Verify financial model is accessible
2. Load detailed instructions from references/task3-valuation.md
3. Execute valuation workflow
4. Deliver valuation analysis

Output: Valuation Analysis (4-6 pages + Excel tabs)

• DCF analysis with sensitivity tables
• Comparable companies (5-10 peers with statistical summary)
• Precedent transactions (if applicable)
• Valuation football field
• Price target: $XX.XX
• Recommendation: BUY/HOLD/SELL
• Upside: XX%
• Key catalysts (3-5)

Files:

• [Company]_Valuation_Analysis_[Date].md (written analysis document)
• Excel tabs added to [Company]_Financial_Model_[Date].xlsx (from Task 2)
  • DCF tab with calculations
  • Sensitivity analysis tab
  • Comparable companies tab
  • Valuation summary tab

⚠️ DELIVER ONLY: 1 markdown file + 4 tabs added to existing Excel. NO completion summaries, no extra documents.

⚠️ DO NOT TAKE SHORTCUTS:

• ✅ Complete full DCF analysis with sensitivity matrix (not simplified)
• ✅ Analyze ALL 5-10 comparable companies with full data
• ✅ Include statistical summary in comps table (max/75th/median/25th/min)
• ✅ Create complete sensitivity analysis tab with multiple WACC and terminal growth scenarios
• ✅ Write full 4-6 pages of valuation analysis (not abbreviated)
• ✅ Research and justify price target with specific methodology
• ❌ Do not skip comparable company analysis
• ❌ Do not create simplified DCF without sensitivity

Verification before proceeding to Task 4:

• Price target determined
• Valuation uses multiple methods (DCF + Comps minimum)
• DCF sensitivity table complete
• Comparable companies table includes statistical summary

Task 4: Chart Generation

Purpose: Generate 25-35 professional financial charts for the report.

Prerequisites: ⚠️ Verify before starting

• Required: Company research from Task 1
  • Company history and milestones (for timeline charts)
  • Management team and org structure (for org charts)
  • Product portfolio (for product charts)
  • Customer segmentation (for customer charts)
  • Competitive landscape (for competitive charts)
  • TAM analysis (for market size charts)
• Required: Financial model from Task 2 (with Task 3 valuation tabs added)
  • Revenue by product/geography data (Task 2 tabs)
  • Margin trends (Task 2 tabs)
  • Scenario comparison data (Task 2 tabs)
  • DCF sensitivity table (Task 3 tab in same Excel file)
  • Comparable companies data (Task 3 tab in same Excel file)
  • Valuation ranges (Task 3 tab in same Excel file)
• Required: External market data
  • Historical stock price data (Yahoo Finance, Bloomberg, etc.)
  • Historical valuation multiples (for historical trend charts)

⚠️ CRITICAL: DO NOT START THIS TASK UNLESS TASKS 1, 2, AND 3 ARE COMPLETE

This task requires outputs from all three previous tasks. Starting without them will result in incomplete charts.

IF ANY OF TASKS 1, 2, OR 3 ARE NOT COMPLETE: Stop immediately and inform the user which tasks need to be completed first. The specific requirements are:

• Task 1: Company research document (for 9 charts)
• Task 2: Financial model with all 6 tabs (for 8 charts)
• Task 3: Valuation tabs added to the model (for 6 charts)
• External data access (for 2 charts)

Do not attempt to create placeholder charts or skip charts due to missing data.

Input Verification:

BEFORE STARTING:
- [ ] Task 1 complete? (Company research exists)
- [ ] Task 2 complete? (Financial model exists)
- [ ] Task 3 complete? (Valuation analysis exists)
- [ ] Can access external market data sources?

Required from Task 1:
- [ ] Company history and milestones (for charts 05, 06)
- [ ] Management team structure (for chart 07)
- [ ] Product portfolio details (for chart 08)
- [ ] Customer segmentation data (for chart 09)
- [ ] Competitive landscape analysis (for charts 16, 17, 18)
- [ ] TAM sizing and market data (for chart 15)

Required from Task 2:
- [ ] Revenue by product (historical + projected) - for chart 03 ⭐
- [ ] Revenue by geography (historical + projected) - for chart 04 ⭐
- [ ] Income statement with margins (for charts 02, 10, 11)
- [ ] Cash flow statement (for chart 12)
- [ ] Scenario comparison data (for chart 14)

Required from Task 3:
- [ ] DCF sensitivity matrix - for chart 28 ⭐
- [ ] DCF components (for chart 29)
- [ ] Comparable companies data (for charts 30, 31)
- [ ] Valuation ranges - for chart 32 ⭐

Required from External Sources:
- [ ] Historical stock price data (for chart 01)
- [ ] Historical valuation multiples (for chart 34)

Process:

1. Verify model and valuation outputs are accessible
2. Load detailed instructions from references/task4-chart-generation.md
3. Execute chart generation workflow
4. Package all charts into a zip file
5. Deliver zip file

Output: 25-35 Professional Chart Files (PNG/JPG, 300 DPI) packaged in zip

4 MANDATORY Charts (must be present) ⭐:

• chart_03: Revenue by product (stacked area)
• chart_04: Revenue by geography (stacked bar)
• chart_28: DCF sensitivity (2-way heatmap)
• chart_32: Valuation football field (horizontal bars)

25 REQUIRED Charts (specific list):

• Investment Summary: chart_01
• Financial Performance: charts 02, 03⭐, 04⭐, 10, 11, 12, 14
• Company 101: charts 05, 06, 07, 08, 09, 15, 16
• Competitive/Market: charts 17, 18
• Scenario Analysis: chart 13
• Valuation: charts 28⭐, 29, 30, 31, 32⭐, 33, 34

10 OPTIONAL Charts (for 26-35 range):

• charts 19-27, 35 (customer acquisition, unit economics, product roadmap, etc.)

IMPORTANT: Task 5 embeds ALL charts created (25-35) for visual density (1 chart per 200-300 words).

File naming: chart_01_description.png, chart_02_description.png, etc.

Deliverable: [Company]_Charts_[Date].zip containing all 25-35 chart files + chart_index.txt

⚠️ DELIVER ONLY THIS 1 ZIP FILE. NO completion summaries, no separate chart lists, no extra documents.

⚠️ DO NOT TAKE SHORTCUTS:

• ✅ Create ALL 25 required charts minimum (specific list provided in task4-chart-generation.md)
• ✅ Include ALL 4 mandatory charts:
  • chart_03: Revenue by product (stacked area) ⭐
  • chart_04: Revenue by geography (stacked bar) ⭐
  • chart_28: DCF sensitivity (heatmap) ⭐
  • chart_32: Valuation football field ⭐
• ✅ Optional: Add 1-10 more charts to reach 26-35 total for greater visual density
• ✅ Generate professional-quality charts at 300 DPI (not low-res placeholders)
• ✅ Create unique, well-formatted charts for each visualization
• ✅ Package all charts in zip file with chart index
• ❌ Do not create only 10-15 charts (minimum is 25)
• ❌ Do not skip any of the 4 mandatory charts
• ❌ Do not use low-quality/placeholder images

Verification before proceeding to Task 5:

• Minimum 25 chart files created (required)
• All 4 mandatory charts present:
  • chart_03: Revenue by product ⭐
  • chart_04: Revenue by geography ⭐
  • chart_28: DCF sensitivity ⭐
  • chart_32: Valuation football field ⭐
• All charts open and display correctly
• Charts saved at 300 DPI (print quality)
• Chart index created listing all files with categories
• All charts packaged in zip file
• File naming follows convention: chart_##_description.png