About Me
Chartered Financial Analyst (CFA)
1 Ethical and Professional Standards
1-1 Code of Ethics
1-2 Standards of Professional Conduct
1-3 Guidance for Standards I-VII
1-4 Introduction to the Global Investment Performance Standards (GIPS)
1-5 Application of the Code and Standards
2 Quantitative Methods
2-1 Time Value of Money
2-2 Discounted Cash Flow Applications
2-3 Statistical Concepts and Market Returns
2-4 Probability Concepts
2-5 Common Probability Distributions
2-6 Sampling and Estimation
2-7 Hypothesis Testing
2-8 Technical Analysis
3 Economics
3-1 Topics in Demand and Supply Analysis
3-2 The Firm and Market Structures
3-3 Aggregate Output, Prices, and Economic Growth
3-4 Understanding Business Cycles
3-5 Monetary and Fiscal Policy
3-6 International Trade and Capital Flows
3-7 Currency Exchange Rates
4 Financial Statement Analysis
4-1 Financial Reporting Mechanism
4-2 Income Statements, Balance Sheets, and Cash Flow Statements
4-3 Financial Reporting Standards
4-4 Analysis of Financial Statements
4-5 Inventories
4-6 Long-Lived Assets
4-7 Income Taxes
4-8 Non-Current (Long-term) Liabilities
4-9 Financial Reporting Quality
4-10 Financial Analysis Techniques
4-11 Evaluating Financial Reporting Quality
5 Corporate Finance
5-1 Capital Budgeting
5-2 Cost of Capital
5-3 Measures of Leverage
5-4 Dividends and Share Repurchases
5-5 Corporate Governance and ESG Considerations
6 Equity Investments
6-1 Market Organization and Structure
6-2 Security Market Indices
6-3 Overview of Equity Securities
6-4 Industry and Company Analysis
6-5 Equity Valuation: Concepts and Basic Tools
6-6 Equity Valuation: Applications and Processes
7 Fixed Income
7-1 Fixed-Income Securities: Defining Elements
7-2 Fixed-Income Markets: Issuance, Trading, and Funding
7-3 Introduction to the Valuation of Fixed-Income Securities
7-4 Understanding Yield Spreads
7-5 Fundamentals of Credit Analysis
8 Derivatives
8-1 Derivative Markets and Instruments
8-2 Pricing and Valuation of Forward Commitments
8-3 Valuation of Contingent Claims
9 Alternative Investments
9-1 Alternative Investments Overview
9-2 Risk Management Applications of Alternative Investments
9-3 Private Equity Investments
9-4 Real Estate Investments
9-5 Commodities
9-6 Infrastructure Investments
9-7 Hedge Funds
10 Portfolio Management and Wealth Planning
10-1 Portfolio Management: An Overview
10-2 Investment Policy Statement (IPS)
10-3 Asset Allocation
10-4 Basics of Portfolio Planning and Construction
10-5 Risk Management in the Portfolio Context
10-6 Monitoring and Rebalancing
10-7 Global Investment Performance Standards (GIPS)
10-8 Introduction to the Wealth Management Process
6.4 Industry and Company Analysis Explained

6.4 Industry and Company Analysis - 6.4 Industry and Company Analysis - 6.4 Industry and Company Analysis Explained

Key Concepts

Porter's Five Forces

Porter's Five Forces is a framework for analyzing the competitive intensity and attractiveness of an industry. It includes five forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and industry rivalry.

Example: In the smartphone industry, the threat of new entrants is moderate due to high capital requirements and brand loyalty. The bargaining power of suppliers is low because there are many component manufacturers. The bargaining power of buyers is high due to many alternatives and price sensitivity.

Industry Life Cycle

The Industry Life Cycle describes the stages through which an industry evolves, from its inception to decline. These stages include introduction, growth, maturity, and decline. Understanding the stage of an industry helps in predicting its future performance and potential.

Example: The electric vehicle (EV) industry is currently in the growth stage, characterized by rapid market expansion and technological innovation. Companies in this stage need to invest heavily in R&D and marketing to capture market share.

SWOT Analysis

SWOT Analysis is a strategic planning tool that evaluates a company's strengths, weaknesses, opportunities, and threats. It helps in identifying internal and external factors that can impact the company's performance and strategic decisions.

Example: A retail company might identify its strengths as a strong brand and loyal customer base, weaknesses as high operational costs, opportunities as expanding into e-commerce, and threats as increasing competition from online retailers.

Competitive Advantage

Competitive Advantage refers to the attributes that allow a company to outperform its competitors. It can be achieved through cost leadership, differentiation, or focus strategies. A sustainable competitive advantage is difficult for competitors to replicate.

Example: A tech company might achieve a competitive advantage through differentiation by offering unique features in its software that competitors cannot easily replicate. This uniqueness attracts customers willing to pay a premium for the product.

Value Chain Analysis

Value Chain Analysis involves breaking down a company's activities into primary and support activities that create value for the customer. It helps in identifying areas where the company can improve efficiency and add value, thereby enhancing profitability.

Example: A manufacturing company might analyze its value chain to identify that its logistics and distribution processes are inefficient. By optimizing these processes, the company can reduce costs and improve delivery times, adding value for customers.

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