HOW TO MAKE INFORMED ECONOMIC SUMMARY DECISIONS.
In order to understand well what is meant by the terms economic analysis we have first to understand the meaning, determining the maximum use a certain scarce resource using a well systematic way can be used as one of the meanings of the said words, also it should be noted that in order to attain that maximum use of such scarce resource there must be having two or more alternatives to compare with. It is at times relatively hard to measure opportunity cost in monetary terms, but using economic analysis it attempts to determine this after acquiring any scarce resource.
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.
Industry cycle how they perform since they start to cooperate till they overcome the market is something that should not be taken for granted since they will directly affect the investment decision regarding investing. 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. Finally it is also good to look at financial statements of a company from the statement of financial position reading through the auditor’s report and the directors report, this reports give almost the same information but vary from the one who makes them but the objective remain almost the same whether the business is being operated in a truthful and fairly manner.
For those who investors who would like to join the stock market , and may be they lack the necessary knowledge to know how things are done here and also how secure their hard earned money is with just a help from a friend or even online help one is good to go. It is very good to do a deep study on how well your broker of choice is well informed about stock market this is because there are many investors who without knowing have ended up suffering at the hands of such brokers yet they claim to know about the stocks 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.