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    E.I.C. Analysis

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    Titas Khan
    EIC analysis is an important framework for evaluating potential investments. It involves analyzing the Economy (E), Industry (I), and Company (C). For the Economy, one should study global and domestic economic factors that could impact growth. For the Industry, one should consider the life cycle stage and analyze structure, competition, demand, costs, and growth. For the Company, select an undervalued stock with good potential based on ratios like PE, EPS, ROE, management quality, and comparing it within its industry and to industry leaders.

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    E.I.C. Analysis

    Uploaded by

    Titas Khan
    19 views1 page
    EIC analysis is an important framework for evaluating potential investments. It involves analyzing the Economy (E), Industry (I), and Company (C). For the Economy, one should study global and domestic economic factors that could impact growth. For the Industry, one should consider the life cycle stage and analyze structure, competition, demand, costs, and growth. For the Company, select an undervalued stock with good potential based on ratios like PE, EPS, ROE, management quality, and comparing it within its industry and to industry leaders.

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    EIC analysis is an important framework for evaluating potential investments. It involves analyzing the Economy (E), Industry (I), and Company (C). For the Economy, one should study global and domestic economic factors that could impact growth. For the Industry, one should consider the life cycle stage and analyze structure, competition, demand, costs, and growth. For the Company, select an undervalued stock with good potential based on ratios like PE, EPS, ROE, management quality, and comparing it within its industry and to industry leaders.

    Copyright:

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views1 page

    E.I.C. Analysis

    Uploaded by

    Titas Khan
    EIC analysis is an important framework for evaluating potential investments. It involves analyzing the Economy (E), Industry (I), and Company (C). For the Economy, one should study global and domestic economic factors that could impact growth. For the Industry, one should consider the life cycle stage and analyze structure, competition, demand, costs, and growth. For the Company, select an undervalued stock with good potential based on ratios like PE, EPS, ROE, management quality, and comparing it within its industry and to industry leaders.

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    E.I.C.

    Analysis
    Before investing in any scrip it is very important to do EIC analysis. What is EIC? Its E = Economy, I = Industry and C = Company. To begin with lets start with economy. Study the overall economic condition of the globe and see how it will impact or affect your country. Analyze the micro and macro economic factors which influences the economic growth of the country like GDP, inflation, interest rates, fiscal and monetary frame work, tax structure, credit policy, BOP, money supply, infrastructure, agriculture and monsoon.

    Then go for Industry. The industry has four life cycles a) Pioneering stage, b)Rapid growth stage, c) Maturity and stabilization stage and d) Declining stage. You should mainly focus on industries in these first three stages and try to avoid the declining stage. In industries one should analysise the following things namely structure of industry and nature of competition, licensing policy, nature and prospects of demand, entry barrier, pricing policy, expected growth rate, no. of firms in market and their market share, cost efficiency and profitability, cost and type of investments. Ie. industries producing capital good will require huge investments in form of infrastructure and machinery as compared to banking sector where investment will be inform of liquid cash.

    Lastly its Company. After taking into consideration E and I you should select the company. For selecting a company you should pick such a company which have more growth potential. A scrip which is undervalued. For doing that you should study and analyze PE ratio, EPS (earning per share), ROE(return on equity), Book value per share, CAGR(sales and EPS), Dividend policy, share holding pattern, future projects of company, managements role or one can say quality of management etc apart from companys P&L and balance sheet. You should compare all these with the industry as a whole and also with the market leader in that particular industry. Eg. If you a choosing a company in banking sector compare that bank with banking sector ie. I and also with the market leader like SBI.

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