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Selection Methods Of Industry Investment

2011/3/15 16:12:00 48

Industry Investment And Sales

The most important thing in choosing an industry is how to predict it correctly.


Future performance.

Investors need to know the answers to these two questions first.

First, what is the historical growth of the industry?

Two, what is the trend of its future growth?

Then, investors are more concerned about the industry's sales and revenue growth in the past, and how the performance compares with the growth of gross national product (or other related statistics, such as national income). After considering all these circumstances, investors are particularly interested in understanding the relationship between industry growth and GDP growth.

Because some industries are growing synchronously with the national economy, and some industries are growing faster, which provides investors with the best.



At the beginning of the analysis step, a sales index is set up to compare a representative base year with other years and to represent sales by percentage.

For example, the annual sales volume is 200 million yuan and the sales volume is 250 million yuan in 1996. The sales index in 1996 is 1.25 x 100%=125%.

If this index is compared with GNP, it can show the corresponding relationship between the growth of a certain industry and the growth of GNP, or the sales index as well as other nationals.


Indicators are compared, such as national income index.

The above relations can be drawn by correlation analysis or regression analysis.

The correlation analysis takes account of two variables (such as GNP and sales), and the relationship between these variables is defined in the time points determined in the coordinates. The established regression lines are most suitable for the general form implied by these points.

That is to say, a clear and simple picture is used to reflect the relationship between sales and gross national product and its degree of intimately. If the trend described remains unchanged, it implies its future relationship.

Although this analysis is accurate for short-term prediction, it is not credible in the long run.

Compound regression analysis refers to the analysis of the influence of several variables on the interaction of certain items.

Computers are often used to build regression lines.

Standard - Pool Co used this analysis procedure in industrial investigation.

The exponential form established by regression analysis provides an important information for industry analysis, which can express the growth rate of an industry by absolute number and relative number (relative business index).

The stability of this growth can also be estimated. It shows the cycle of the industry and predicts future growth.

In the analysis process, the selected enterprises and periods are very important.

Because they will represent an industry.

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