Research Analyst Qualification Examination
The Series 86/87 examination qualifies candidates to function as research analysts at FINRA member firms. The exam is divided into two parts: Part 1 (Series 86) tests analysis competencies including financial statement analysis, valuation methodologies, and quantitative concepts, while Part 2 (Series 87) covers research report writing, regulatory requirements, and communication with the public. Research analysts play a critical role in the capital markets by producing independent, objective research that helps investors make informed decisions. This course covers all testable topics across both parts, from SEC filings and ratio analysis to DCF valuation, comparable analysis, and FINRA Rule 2241 compliance.
Chapters
Information Sources & SEC Filings
SEC filings (10-K, 10-Q, 8-K, proxy statements), financial databases, industry reports, and primary research
Financial Statement Analysis
Income statement, balance sheet, and cash flow statement analysis for equity research
Ratio Analysis & the DuPont Framework
Profitability, liquidity, leverage, efficiency ratios, and the DuPont decomposition of ROE
Valuation: Discounted Cash Flow
DCF methodology, WACC calculation, free cash flow projection, terminal value, and sensitivity analysis
Valuation: Comparable Analysis
Trading comps, transaction comps, EV/EBITDA, P/E, EV/Revenue, and selecting peer groups
Research Reports & Communications
Report structure, ratings systems, price targets, disclaimers, and public communications
Forecasting & Earnings Models
Revenue drivers, earnings models, sensitivity analysis, scenario analysis, and margin forecasting
Regulations & Ethics
FINRA Rule 2241, conflicts of interest, Reg FD, information barriers, quiet periods, and analyst independence