Identify and briefly discuss several aspects of an industry that are important to its behavior and operating characteristics. Note especially how economic issues fit into industry analysis.
Answer to relevant QuestionsWhat are the four stages of an industry’s growth cycle? Which of these stages offers the biggest payoff to investors? Which stage is most influenced by forces in the economy? What is intrinsic value? How does it fit into the security analysis process? What is industry analysis, and why is it important? Stroud Sporting Gear Inc. has a net profit margin of 6%, a total asset turnover of 2.5, total assets of $250 million, and total equity of $125 million. What is the company’s return on equity? ZAPIT common stock is selling at a P/E of 15 times trailing earnings. The stock price is $25. What were the firm’s earnings per share?
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