How to Explain Your Data Source in a Client or Investment Memo

“Revenue grew 12.4%.” That sentence may survive a quick read. It may not survive the first review.

Which revenue figure did you use? Was it copied from the company's filing or retrieved as a standardized field? Which period does it cover? Did you compare it with the previous reported period, the same period a year earlier, or a trailing twelve-month figure?

The source note should answer those questions without turning a two-page investment note into a data dictionary. A good memo makes the evidence trail visible. It separates company-reported information from market observations, analyst estimates, calculated metrics, and assumptions created inside the model.

You can keep the supporting research detailed while making the published explanation compact. The practical task is to decide what belongs beside a figure, what belongs in the memo's general source note, and what should remain in the supporting workbook.

Key Takeaways

• Name the provider and the actual dataset used, rather than writing only “Source: FMP.”
• State the relevant reporting period or market observation alongside the retrieval date.
• Distinguish sourced figures from calculations, external estimates, and your own assumptions.
• Keep the general source note short, with figure-specific details where interpretation depends on them.

Start With the Number, Not the Citation

The easiest way to write a weak source note is to start and finish with the provider name. “Source: FMP” tells the reader where you obtained information, but it does not explain what the number represents.

Start with the figure instead. Ask what a reviewer would need to understand it. Suppose a memo compares revenue for two annual periods. The note should identify the data used, fix the comparison periods, and make clear whether the growth rate is your calculation.

For example:

Source: FMP standardized income statement data for the years ended December 31, 2023 and December 31, 2024, retrieved February 18, 2025. Revenue growth calculated by the author as current-year revenue divided by prior-year revenue, minus one.

This wording distinguishes the access provider, dataset, and analyst calculation. If you checked the inputs against the company's filing, identify that filing separately. Do not describe a standardized provider field as a directly transcribed filing value unless that is what you used.

FMP's Income Statement API is one relevant source for this type of analysis. The source note should name the dataset you actually retrieved and the periods you selected, rather than assuming the latest record is automatically the correct comparison point.

In peer analysis, “latest” is a data attribute. “Comparable” is an analytical judgment. Your source note should document the first without pretending it establishes the second.

Decide Where Each Explanation Belongs

Not every detail needs to appear in every footnote. Use the memo's general source note for information shared across the analysis, and put exceptions or calculation details beside the figures they qualify.

Location	What belongs there
General source note	Provider, datasets, retrieval date, and common treatment applied across the memo
Table or chart note	Exact periods, price cutoff, units, adjustment basis, and calculation details specific to that exhibit
Body text	Interpretation and limitations that affect the investment argument
Supporting workbook	Saved inputs, source references, field names, formulas, and version records needed to reproduce the work

For example, a general note can state that financial inputs came from FMP's standardized statements. A valuation table should still identify its price cutoff and material assumptions. If one peer uses a different fiscal year-end, make that visible in the comparison itself.

A PDF sent to a client should make sense even if the client never sees the workbook behind it.

Separate Reporting Period From Data Timing

A financial number and the date you retrieved it are not the same thing. That sounds obvious until a memo combines financial statements, share prices, and estimates in one valuation table.

Consider an illustrative memo prepared on February 18, 2025. It uses financials for the year ended December 31, 2024, a filing dated February 14, and the February 14 closing price. The estimate set was retrieved on February 18. One memo now contains several different dates.

Date or period	Illustrative example	What it establishes
Reporting period	Year ended December 31, 2024	The financial period measured
Filing date	February 14, 2025	The date associated with the source filing
Market observation	February 14, 2025 close	The price observation selected
Estimate retrieval	February 18, 2025	When the author captured the forecast set
Memo date	February 18, 2025	When the analysis was prepared

Writing “Data as of February 18” can hide all of those distinctions. A more useful note names the financial period and price cutoff, then identifies when the inputs were retrieved.

For estimates, distinguish the forecast period from the date you observed the forecast. Do not treat a field describing the future fiscal period as the date on which consensus was published or updated. Your retrieval record establishes what you captured at that time, not necessarily when the provider first made it available.

Use the actual reporting period, too. “Year ended September 30, 2024” carries less ambiguity than a generic fiscal-year label when companies have different year ends.

Separate Sourced Inputs, Calculations, and Assumptions

A source note becomes much clearer when it tells the reader where the data ends and your analysis begins.

Suppose an illustrative income statement contains revenue of $9.2 billion and operating income of $1.1 billion. You calculate operating margin of approximately 12.0%. The first two figures are sourced inputs; the margin is your calculation. That difference should remain visible.

Memo item	Classification	Useful wording
Revenue	Sourced financial input	“Revenue from FMP standardized income statement data for the year ended…”
Operating margin	Author calculation	“Calculated as operating income divided by revenue”
Provider-supplied ratio	Sourced derived metric	“Ratio retrieved from the named dataset for the stated period”
Forward EPS	External estimate	“Analyst EPS estimate for the stated forecast period, retrieved on…”
Discount rate	Author assumption	“Model assumption of…”
Implied value	Model output	“Calculated using the stated inputs and valuation assumptions”

Standardized financial data adds a useful structure, but it does not eliminate the underlying reporting context. If you use a provider-supplied ratio, identify it as a sourced metric. If you calculate your own ratio from statement fields, identify the calculation instead. Avoid wording such as “ratios are calculated or sourced,” which leaves the reviewer unable to tell what you actually did.

Estimates require equally careful wording. Write “2026 revenue estimate retrieved on February 18, 2025,” rather than presenting projected revenue as a reported result. If you use the average estimate, identify that measure rather than leaving the reader to guess whether you selected the low, average, or high value.

A good memo keeps source observation, analyst calculation, and analyst interpretation distinguishable. The reader should be able to challenge each without having to reconstruct the others first.

Explain Material Methods and Limitations

A client rarely needs your entire spreadsheet. They do need enough information to understand how a material output was produced.

For an illustrative five-year revenue CAGR, an increase from $5.0 billion to $8.0 billion produces approximately 9.9% annualized growth. The note should state the beginning and ending periods and the method:

Revenue CAGR calculated by the author as (ending revenue ÷ beginning revenue) raised to the power of one-fifth, minus one. Inputs reflect the years ended December 31, 2019 and December 31, 2024.

For market returns, identify the actual endpoint dates, field, and adjustment basis. A calculation based on closing prices should not be called total return unless it incorporates distributions appropriately. Use the price dataset documentation to confirm which series you retrieved before describing it.

Valuation outputs require a different explanation. Historical financials and external estimates may supply inputs, while discount rates, terminal growth, and scenario probabilities may be your assumptions. State that division in the methodology note and put the material assumption values in the valuation table.

FMP provides structured data. It does not determine the correct discount rate, peer set, scenario probability, or investment conclusion.

The same boundary applies to performance claims. A decline in operating margin establishes a change in the reported or calculated measure. It does not, by itself, establish that management execution caused the decline. Discuss possible causes only to the extent that additional disclosure supports them, and keep that qualification beside the interpretation.

Identify the Filing When It Supports the Argument

Structured financial data does not remove the need to inspect a filing when accounting context matters. If your explanation relies on a note about receivables, restructuring, or another unusual movement, identify the actual disclosure rather than writing only “SEC data.”

A useful filing reference includes the company, form type, filing date, and relevant section or note, with a link to the document where possible. The provider can help you locate the record; the filing remains the underlying regulatory disclosure.

Historical values can be revised, amended, or restated. When using refreshed values, state which version you selected and retain the earlier memo's inputs. If a material figure changes, explain what changed and what evidence supports the reason. When revisions affect the inputs in a financial model, the memo should identify whether it uses the original disclosure, a later amended filing, or the latest retrieved values. A retrieval date alone does not establish which disclosure version supports a figure.

Do not claim that a discrepancy proves an error or restatement. Describe the difference first, then assign a cause only when the supporting evidence establishes it.

Record the Source Trail Before the Memo Is Finished

Source documentation is easiest when it happens during the research process. Waiting until the end creates a familiar problem: you remember what a number means, but not exactly where it came from or which version you captured.

A small source register can preserve:

• The company or security identifier and listing.
• Provider, dataset, original field name, and source reference.
• Reporting period, or market observation date and time where applicable.
• Currency, units, and any adjustment or transformation.
• Retrieval date and a reference to the saved inputs.
• Calculation method or analyst assumption.
• Material limitations and supporting filing references.

A period end belongs in the reporting-period field. Do not relabel it as the observation date. For an estimate, retain both its forecast period and your retrieval time; for a calculated metric, preserve the actual inputs.

The register supports the memo, but it does not replace validation before financial data enters a model. Before writing the note, confirm that the saved records match its description. Check the company or security, reporting periods, currency, units, and any material transformations. If a high-impact figure cannot be traced to its supporting inputs, resolve that gap before using it in the memo.

Keep the Final Source Note Compact

A strong source note does not need to dominate the page. The following is a reusable template. Replace each bracketed item with the details of the work you actually performed:

Sources: FMP [specific datasets], retrieved [date]; [company, filing type, filing date, and relevant note] where cited. Financial inputs cover [reporting periods]. Market inputs use [field, adjustment basis, and observation dates]. Forecasts use [estimate measure] for [forecast periods], retrieved [date]. Derived metrics are calculated by the author using the methods stated with each exhibit. Valuation assumptions are identified in the model summary.

Omit components you did not use. If different datasets were retrieved on different dates, show those dates in a source table rather than forcing them into one shared cutoff.

Here is a completed illustrative note for a memo using annual financials, one closing price, and forward revenue estimates:

Sources: FMP standardized income statement data, daily closing-price data, and financial estimates, retrieved February 18, 2025. Financial inputs cover the years ended December 31, 2023 and December 31, 2024. The valuation uses the February 14, 2025 closing price. Forecast revenue uses the average analyst estimate for the period ending December 31, 2026. Revenue growth and operating margin are calculated by the author from the statement inputs. Discount rate and terminal growth are author assumptions stated in the valuation table.

This note identifies what was used without claiming that all inputs describe the same date. It would still need a figure-specific explanation if the memo included a market return, a currency conversion, a different fiscal calendar, or a material revision.

Before sending the memo, check that every material figure has an identifiable source and period, estimates are labeled, assumptions are visible, and the note matches the actual dataset and method used. Keep the workbook's supporting records with the memo version so a later update does not depend on memory.

Documenting sources and obtaining permission to distribute data are separate tasks. Before sharing FMP-sourced figures with clients or other readers, confirm the publication and distribution rights applicable to your report. A citation does not itself grant those rights.

The source note is part of the analytical output. It gives the reviewer a practical path from the number to its evidence and shows where your interpretation begins.

Frequently Asked Questions

What Should I Include in a Financial Data Source Note?

Name the provider and dataset, state the reporting period or market observation, and record when you retrieved the inputs. Identify calculations and material assumptions, with figure-specific methods or limitations beside the relevant exhibit.

Is “Source: FMP” Enough for a Client Memo?

It identifies the provider but leaves the dataset and treatment unclear. Specify whether you used standardized statements, market observations, a sourced ratio, or estimates, and identify the relevant period. Citation also does not establish permission to distribute the data.

How Should I Cite Market Data?

Identify the security, field, actual observation dates, frequency, and adjustment basis. Explain whether the output measures price return or includes distributions. Use valid observations from the selected series rather than assuming a calendar date has a trading record.

How Should Analyst Estimates Be Documented?

Label them as estimates, identify the forecast period and selected measure, and state when you retrieved the estimate set. Do not imply that the retrieval date is the original publication date or that a later response reproduces an earlier consensus snapshot.

Should Model Assumptions Be Included in the Source Note?

Identify material assumptions as your own rather than attributing them to the provider. Put their values and methods in the valuation or methodology section, and use the source note to distinguish them from retrieved inputs.