1. UNIT-III
INDUSTRY ANALYSIS

2. I. Fundamental analysis
Economic analysis
Industry analysis
company analysis
II. Technical analysis

3. Fundamental analysis is really a logical and systematic approach for estimating the future dividends and share price-determined by fundamental factors

4. ECONOMIC ANALYSIS PERFORMANCE
Boom-the companies in general to be prosperous
Recession-poor

5. ECONOMIC VARIABLES
Gross national product(GNP)-The aggregate value of goods and services produced in the economy. Higher the rate of growth of GNP-favourable for the stock market

6. Savings and investment-25%,increasing trend
Inflation-higher rate of inflation upset business plan
Agriculture-some companies are directly affected by the changes in agricultural production

7. Rates of interest--higher rate of interest-higher cost of production-low demand
Govt revenue,expenditure and deficits
Infrastructure-electricity,roads and railways
Monsoon
Political stability-stable

8. INDUSTRY ANALYSIS
Performance of companies would be influenced by the fortunes of the industry to which it belongs
It refers to an evaluation of the relative strengths and weaknesses of particular industries

9. Life cycle of an industry
Characteristics of an industry
Profit potential of an industry

10. Life cycle of an industry
Pioneering stage
Expansion stage
Stagnation stage
Decay stage

11. CHARACTERISTICS OF AN INDUSTRY
Relationship between demand and supply
Period of life
State of labour
Government’s attitude
Availability of raw materials
Cost structure

12. PROFIT POTENTIAL OF AN INDUSTRY
Threat of new entrants
Competition among existing firms
Pressure from substitute products
Bargaining power of buyers
Bargaining power of sellers

13. Company analysis 1.Marketing success sales growth in sales
stability of sales
2.accounting policies
inventory pricing-FIFO,LIFO,costor market value
depreciation methods-straight line method

14. non-operating income –dividend, interest
tax carry over
profitability
gross profit margin
net profit margin
earning power
return on equity

15. Earning per share
Cash earning per share
Financial statement analysis
Ratio analysis

16. THANK YOU