- CFA Exams
- Level I 2020
- Study Session 13. Equity Investments (2)
- Reading 40. Introduction to Industry and Company Analysis
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Learning Outcome Statements PDF Download
| 1. Uses of Industry Analysis a. explain uses of industry analysis and the relation of industry analysis to company analysis; | |
| 2. Approaches to Identifying Similar Companies 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; 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"; d. explain how a company's industry classification can be used to identify a potential "peer group" for equity valuation; | |
| 3. Industry Classification Systems 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; 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"; d. explain how a company's industry classification can be used to identify a potential "peer group" for equity valuation; | |
| 4. Principles of Strategic Analysis e. describe the elements that need to be covered in a thorough industry analysis; f. describe the principles of strategic analysis of an industry; g. explain the effects of barriers to entry, industry concentration, industry capacity, and market share stability on pricing power and price competition; 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; | |
| 5. External Influences on Industry Growth, Profitability, and Risk i. compare characteristics of representative industries from the various economic sectors; j. describe macroeconomic, technological, demographic, governmental, and social influences on industry growth, profitability, and risk; | |
| 6. Company Analysis k. describe the elements that should be covered in a thorough company analysis. |
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