EI : Reading 48. Introduction to Industry and Company Analysis

reading: 48. Introduction to Industry and Company Analysis

a. explain uses of industry analysis and the relation of industry analysis to company analysis. (page 267)

▪ 산업분석은 회사에 대한 이해를 돕는 framework 제시

▪ Understanding a company’s business and business environment

▪ 회사의 현재 산업 business cycle에 따라 가중치 조절 - Industry Rotation

▪ Portfolio performance attribution 성과분석에서 산업은 주요 component

 

b. compare methods by which companies can be grouped, current industry classification systems, and classify a company, given a description of its activities and the classification system. (page 268)

▪ grouped

✓ Product / Services

✓ Business-Cycle Sensitivities : cyclical vs noncyclical

✓ Statistical Similarities

 

▪ Industry Classification System

Commercial Classification	개별 회사 명시	업데이트 주기 짧음	회사 size로 구분	profit, public firm만 대상
Governmental Classification	개별 회사 명시 안함	업데이트 주기 길음 (5년)	회사 size구분 안함	public-private, profit-not profit 구별 안함

 

c. explain the factors that affect the sensitivity of a company to the business cycle and the uses and limitations of industry and company descriptors such as "growth," "defensive," and "cyclical." (page 271) 

▪ Cyclical Company

- Profits strongly correlated with economic activity

- High operating leverage

- Expensive&nonessential products

 

▪ Defensive Company

- stable of the business cycle (영향 적음)

 

▪ Growth Company

- stable of the business cycle (영향 적음)

 

▪ Limitations of Industry and Company Descriptors

- 분류가 겹칠수 있음

✓ Cyclical industry로 분류한 회사 중에도 경기 민감도 낮은 회사 존재

✓ Defensive industry로 분류된 회사 중에 Growth firm 포함될 수 있음

✓ 2008년과 같은 Deep recession에는 섹터 구분 무관하게 모두 영향 받음

 

d. explain how a company's industry classification can be used to identify a potential "peer group" for equity valuation. (page 272)

peer group : set of similar companies

- similar business activity 영위

- valuation 비교하는데 쓰임

 

e. describe the elements that need to be covered in a thorough industry analysis. (page 272)

- macroeconomic 변수와 industry trend의 관계

- 해당 산업의 life-cycle stage 고려

- 해당 산업의 experience curve 고려 ( 과거 cost per unit에 대한 mc커브)

 

f. describe the principles of strategic analysis of an industry. (page 273)

▪ 산업분석은 산업의 매력도(attractiveness)를 평가하는 것.

▪ 경제적 이익(Economic profit)이 있는 산업이 매력적인 산업

▪ Economic profit = ROIC(투하자본수익률) – cost of capital(자본조달비용)  경제적 이익은 Pricing power에 의해 결정

 

strategicanalysis

5 Forces : 마이클 포터

- 5가지의 내부적 Factors를 의미 

1. New Entrants (Threat of entry) : 신규진입장벽

2. Rivalry : 현재 존재하는 기업의 산업 경쟁강도

3. supplier power : 가격 결정력

4. buyer power : 구매자의 가격 교섭력

5. substitutes : 대체제의 존재

 

g. explain the effects of barriers to entry, industry concentration, industry capacity, and market share stability on pricing power and price competition. (page 275)

1. High Barriers to Entry (lower barriers to exit)

2. Concentrated Industry

3. Under-capacity : 초과수요

4. Stable market share

5. switching cost : 소비자가 기존사용하던 제품을 바꾸는데 드는 비용

- 이로 인해 Greater Pricing power 가능성 높음

- Sustainable 한 economic profits 가능

 

h. describe industry life cycle models, classify an industry as to life cycle stage, and describe limitations of the life-cycle concept in forecasting industry performance. (page 277)

 

 

I. compare characteristics of representative industries from the various economic sectors. (page 279)

j. describe macroeconomic, technological, demographic, governmental, and social influences on industry growth, profitability, and risk. (page 280)

 

1. Macroeconomic Influences : GDP Growth, Interest Rates, Inflation 등

2. Technological Influences : Digital camera 등

3. Demographic Influences : Baby Boomer generation, Aging populations 등

4. Governmental Influences : Tax policies, Regulation 등

5. Social Influences : Women in the workforce 등

 

k. describe the elements that should be covered in a thorough company analysis. (page 281)

1. company profile : basic understanding of its businesses, corporate governance, strengths & weaknesses

2. Financial Ratio

3. Product & Service

4. Competitive Strategy : low-cost strategy (cost leadership, 원가전략) or differentiation strategy (차별화 전략)

5. spreadsheet modeling : 기업 fundamental 분석 및 예측에 사용. 분석 모델이 정확해 보이지만, 먼 미래를 추정할수록 오차가 커져서 error유의