How do market share price rise? Understanding stock analysis.

Stock Market Analysis

Stock Market share price of companies depend on three factor-

a.)Economic Analysis
b.)Industries Analysis/Segment Analysis
c.)Companies Analysis

Economic Analysis

The Economic Analysis considered country financial environment which may give some indication of future direction of share.Economic analysis is mirror of an economy of country.
Example-If inflation and interest rate is high that mean stock prices should tend to fall.

 Economic Analysis on major six factors

➤GDP
➤INFLATION RATE OF COUNTRY
➤RATE OF INTEREST
➤CORPORATE TAXATION
➤GROWTH RATE
➤CURRENCY RATE IN FOREIGN EXCHANGE


Q.)What should be the specialty of a country with good economy?
   

Economic Cycle Stage	High
Gross National Income	High
Employment	Increase ⇧
Rate of Interest	Low       ⇩
Price of Product	Stable
Rupees in Foreign Exchange	Strong
Balance of Funds	Positive

                                                   

Industry Analysis

Analysis of an industry that is providing same product and technology to the customers.
Example-Chemical production,Auto part production,Agro product,Metal production etc.

Industries are three types-

➤Small Scale Industries
➤Medium Scale Industries
➤Large Scale Industries

Production wise classification-

a.)Chemical
b.)FMCG
c.)Auto Sector
d.)Agro
e.)Metal etc.

Industries Analysis should be behalf of some important factors-

➤Past Sale and Earning Performance
➤Attitude of Government toward the industry
➤Labor Satisfaction
➤Competition Condition with other same industry
➤Industry index like metal index,auto index etc.

  Company Analysis

Analyzing a particular company is called a company analysis.What age group customer of  the product that the company is making?What is the Business model of the company?What is the financial position of the company?

Company  Analysis are two factor-

1.)Financial Indicator
2.)Non Financial Indicator 


                               Financial Indicator

Investment of Company

Net Asset value of firm

Income and Taxation of company

Return on Investment

Net Profit Margin

Return on Equity

Earning Per Share

Dividend Payout Ratio

                         Non Financial Indicator

Top Management Behavior

Product Range

Availability Cost of inputs

Research and Development  Team

Government Regulations

Foreign Collaboration

Diversification

Employee  Satisfaction

Hope you understand this article, if there is any question related to this article, then you can ask and comment.

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