Security Analysis Chapter 9

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Chapter 9 study guide
Kyle Olson
Fichas por Kyle Olson, actualizado hace más de 1 año
Kyle Olson
Creado por Kyle Olson hace alrededor de 8 años
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Macroeconomic environment Aggregate economic activity including GDP, interest rates, consumer spending and income and unemployment
Microeconomic environment Industry/firm level including industry specific regulation and material prices
Forces driving the economy Demographics Productivity International Trade
Productivity The ability to produce more with the same number of people. When productivity goes up so does standard of living
Business cycles Pattern of economic recession and expansion.
Economic indicators Data series that successfully describe the pattern of projected, current or past economic activity
Leading indicators Money supply, building permits, claims for unemployment
Lagging indicators Consumer price index, inventories, labor cost
Coincident indicators Industrial production, personal income, payrolls
Industry's market structure Number and size of competitors, conditions of entry and exit, monopoly, oligopoly
Competitive advantage Better, cheaper, faster
Porter's Five Forces Rivalry among existing competitors Threat of new entrants Pressure from substitutes Bargaining power of customers Bargaining power of suppliers
Concentration Ratio CRn = [(Sum of n number of firms sales) / Industry Sales] x 100 (measures percentage of market share controlled by top n number of firms)
CR ratio meaning Low numbers mean vigorous competition, greater than 80% means highly concentrated
Herfindahl Hirschmann Index (HHI) Sum of market share per company squared Ranges from 0 to 10,000
HHI rules HHI over 1800 represents a concentrated industry, low competition means high HHI. DOJ investigates mergers that increase the HHI by more than 100 points
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