Industry Structure and External Influences

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External Influences on Industry Growth Analysing the structure of an industry primarily involves looking inside the industry and at close adjacencies such as customers, suppliers, and substitutes. It is important for analysts to look outside the industry for factors that influence the industry’s economic outcomes. One framework for this purpose is a PESTLE analysis of the political, economic, social, technological, legal, and environmental influences on an…

Equity indexes

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Broad Market Indexes A broad equity market index, as its name suggests, represents an entire given equity market and typically includes securities representing more than 90 percent of the selected market.  Multi-Market Indexes Multi-market indexes usually comprise indexes from different countries and regions and are designed to represent multiple security markets. Multi-market indexes may represent…

Orders and Execution Instructions

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Buyers and sellers communicate with the brokers, exchanges, and dealers that arrange their trades by issuing orders. All orders specify what instrument to trade, how much to trade, and whether to buy or sell. Most orders also have other instructions attached to them. These additional instructions may include execution instructions, validity instructions, and clearing instructions. Execution…

Solvency Ratios

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Solvency refers to a company’s ability to fulfill its long-term debt obligations. Assessment of a company’s ability to pay its long-term obligations (i.e., to make interest and principal payments) generally includes an in-depth analysis of the components of its financial structure. Solvency ratios, introduced in earlier modules in Corporate Issuers, provide information regarding the relative…

Differences between Accounting Profit and Taxable Income

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A company’s accounting profit is reported on its income statement in accordance with prevailing accounting standards. Accounting profit (also referred to as income before taxes or pretax income) does not include a provision for income tax expense. A company’s taxable income is its income subject to income taxes under the tax laws of the relevant jurisdiction. A company’s…