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    Economic Industry Company Analysis - EIC Analysis of A Company

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    Vivek bisht
    The document discusses the process of Economic, Industry, Company (EIC) analysis for investing in stocks. It explains that EIC analysis examines the overall economy, then identifies attractive industries, and finally attractive companies within those industries. It describes the three components of EIC analysis in more detail. Economic analysis considers macroeconomic factors that impact all stocks. Industry analysis identifies defensive industries that can withstand economic downturns. Company analysis evaluates individual companies using approaches like value and growth investing, and financial ratios to identify potential investment opportunities. The document directs readers to pages in a referenced textbook for more information on qualitative and quantitative factors to analyze companies. It provides contact information for the instructor in case

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    Economic Industry Company Analysis - EIC Analysis of A Company

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    Vivek bisht
    189 views3 pages
    The document discusses the process of Economic, Industry, Company (EIC) analysis for investing in stocks. It explains that EIC analysis examines the overall economy, then identifies attractive industries, and finally attractive companies within those industries. It describes the three components of EIC analysis in more detail. Economic analysis considers macroeconomic factors that impact all stocks. Industry analysis identifies defensive industries that can withstand economic downturns. Company analysis evaluates individual companies using approaches like value and growth investing, and financial ratios to identify potential investment opportunities. The document directs readers to pages in a referenced textbook for more information on qualitative and quantitative factors to analyze companies. It provides contact information for the instructor in case

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    430KarishmaKhurana1

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    The document discusses the process of Economic, Industry, Company (EIC) analysis for investing in stocks. It explains that EIC analysis examines the overall economy, then identifies attractive industries, and finally attractive companies within those industries. It describes the three components of EIC analysis in more detail. Economic analysis considers macroeconomic factors that impact all stocks. Industry analysis identifies defensive industries that can withstand economic downturns. Company analysis evaluates individual companies using approaches like value and growth investing, and financial ratios to identify potential investment opportunities. The document directs readers to pages in a referenced textbook for more information on qualitative and quantitative factors to analyze companies. It provides contact information for the instructor in case

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    189 views3 pages

    Economic Industry Company Analysis - EIC Analysis of A Company

    Uploaded by

    Vivek bisht
    The document discusses the process of Economic, Industry, Company (EIC) analysis for investing in stocks. It explains that EIC analysis examines the overall economy, then identifies attractive industries, and finally attractive companies within those industries. It describes the three components of EIC analysis in more detail. Economic analysis considers macroeconomic factors that impact all stocks. Industry analysis identifies defensive industries that can withstand economic downturns. Company analysis evaluates individual companies using approaches like value and growth investing, and financial ratios to identify potential investment opportunities. The document directs readers to pages in a referenced textbook for more information on qualitative and quantitative factors to analyze companies. It provides contact information for the instructor in case

    Copyright:

    © All Rights Reserved
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    of 3

    Delhi College Of Arts and Commerce

    University of Delhi
    Subject-INVESTING IN STOCK MARKET ( E- Resources)
    COURSE- B Com (Prog) SEMESTER IV-C
    DATE – 30th April, 2020
    TOPICS TO BE COVERED TODAY-
     Revision of Fundamental analysis (EIC framework) and Factors to consider while analyzing
    companies. (Qualitative and Quantitative)

     Economic Industry Company


    Analysis | EIC Analysis of a Company

    In security selection process, a traditional approach of Economic Industry Company


    analysis is employed. EIC analysis is the abbreviation of economic, industry and
    company. The person conducting EIC analysis examines the conditions in the entire
    economy and then ascertains the most attractive industries in the light of the economic
    conditions. At last the most attractive companies within the attractive industries are
    pointed out by the analyst.

    EIC Analysis of a Company


    Below are the further details of the components of EIC analysis, which analyst always
    consider before choosing or reaching any decision about any business.

     Economic Analysis
     Industry Analysis
     Company Analysis

    1. Economic Analysis:

    Every common stock is susceptible to the market risk. This feature of almost all types
    of common stock indicates their combined movement with the fluctuations in the
    economic conditions towards the improvement or deterioration.

    Stock prices react favorably to the low inflation, earnings growth, a better balance of
    trade, increasing gross national product and other positive macroeconomic news.
    Indications that unemployment is rising, inflation is picking up or earnings estimates are
    being revised downward will negatively affect the stock prices. The stock market will
    forecast an economic boom or recession properly from the signs in front of average
    citizen. The implications of market risk should be clear to the investor. When there is
    recession in the economy, the prices of stocks moves downward. All the companies
    suffer the effects of recession despite of the fact that these are high performing
    companies or low performing ones. Similarly the stock prices are positively affected by
    the boom period of the economy.

    2. Industry Analysis:

    It is clear there is certain level of market risk faced by every stock and the stock price
    decline during recession in the economy. Another point to be remembered is that the
    defensive kind of stock is affected less by the recession as compared to the cyclical
    category of stock. In the industry analysis, such industries are highlighted that can
    stand well in front of adverse economic conditions.

    3. Company Analysis:

    In company analysis different companies are considered and evaluated from the
    selected industry so that most attractive company can be identified. Company analysis
    is also referred to as security analysis in which stock picking activity is done. Different
    analysts have different approaches of conducting company analysis like

    1. Value Approach to Investing


    2. Growth Approach to Investing

    Additionally in company analysis, the financial ratios of the companies are analyzed in
    order to ascertain the category of stock as value stock or growth stock. These ratios
    include price to book ratio and price-earnings ratio. Other ratios like return on equity
    etc. can also be analyzed to ascertain the potential company for making investment.

    FOR QUALITATIVE AND QUANTITATIVE FACTORS APPLICABLE IN


    ANALYSING COMPANIES- REFER PG. 66-86, from book- Investing in stock
    market by Dr. RS BHARDWAJ.

     NOTE: In case of difficulty in understanding of any topic, students


    can freely contact the undersigned.
     Subject taught by: Ms. Karishma Khurana
     (Assistant Professor, DCAC )
     # 9711101731

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