MAKING INFORMED DECISION ECONOMICALLY.
Economic analysis is defined as an arranged or systematic way to determine the maximum use of a certain scare resource, to attain this objective there has to be comparison of other alternatives in a well illustrated constrains and assumptions. Since in business it’s mostly about knowing how much one is gaining or losing economic analysis accounts for the opportunity cost incurred in acquiring a given scare resource and tries to measure it in monetary terms.
In order to have informed expert analysis there are some of the things that one should like to consider as they will help him reach a good and favorable decision regarding the scarce resource he wants to acquire. For a smooth and calm operation f business anywhere around the world there must have a smooth political environment, therefore before one decides the best place to invest he should make sure that there is political stability as this will gear and encourage economic growth hence more investors.
Understanding the industry cycle is something that should not be ignored by any investor out there, it is good to determine how this will affect the investor. Understanding company cycles helps one to understand the correct time to invest in a given industry either during initial stage of incorporation of the business or during the last phases of maturity and later decline. Company’s operating ratios and cash flow statement also gives good ideas and also helps one to make informed decisions regarding a certain investment. Auditors report, directors report and statements of financial position of an entity can be used by any investor to understand how the company has been performing over the year, having gone through all this financial statement makes the investor make an informed decision regarding investment.
Expert economic analysis will also be important when decides to venture in the stock exchange what will be required is just some knowledge on how stock market operates and even with online or a friends help you are good to go. Visiting the broker company of choice is a very wise idea and asking many questions as possible should be encouraged to any investor who wills to invest in this sector, since there are many brokers out there who tend to proof as they know how the business is operated but in the real since they don’t. Analyzing ratios of any given company should always be done to ensure that you rely on understanding how the company has been performing.