1: economic analysis Definition
2: how it works
3: economic analysis vs statistical analysis
4: example of economic analysis.
Opening information:
Economic analysis sentence breaks into two words, economic and analysis, economic means money matters of one country, analysis means research of something.
Economic analysis means research about one country’s money matter, so now let’s have a look wat hat is economic analysis in business, how economic research works in the stock market for all the stock Investor, and what is difference between economic analysis and statistical analysis, finally one clear example about the economic analysis.
1: economic analysis Definition
Mr. Maich is the one, who is looking to research any of the issues or problems around the business.
He is the best Investor who invests in himself and does not rely on any other Investors or Investment advice. whenever he invests he does three analytics, which means fundamentals, technical, and economical research for the such.
When he researched the Otta textile business, the Otta had a huge amount of debt already which they had managed the debt by paying from the standard of their Industry.
Last, the reason for the new presidential election, the interest rate has changed rapidly which makes the Otta business highly struggle to pay their whole debt.
Because the business Income are not enough to pay the debt or whole expenses to run the business, this leads the Otta business highly problematic, so Maich decided not to invest in an Otta business even if such a business had a great income.
Here the research which are conducted by Mr. Maich about how the Otta affected by society is called economic analysis. So now let’s dive into how this economic analysis works in the stock market.
2: how economic analysis works
Economic analysis represents the research of one country or society about money matters, which means how it’s going to affect the public business and stock Investors.
If the economy faces a strong recession, then not all businesses survive well some of them get into very hard trouble even if the specific Company did well.
When federal banks raise interest rates for businesses and other things, automatically economy of businesses is down in the problem of raising capital for such businesses.
Next, whenever any of the prices of the raw material product increased in society, most of the companies had problems collecting products to manufacture such increased product items.
Then when the inflation increased, the selling products of businesses and their services would be highly affected for any reason.
On the other hand, stock Investors who invest in the public market, which means those who hold big amount of stake in public Corporations would be affected by the investment return because of inflation which is created by the government.
Moreover, whenever any of the government got changed through elections next week there would be new rules and laws too created.
But their new laws or rules might also have a chance to fire or bankrupt some businesses in the manner of government and there is also a chance some companies might have gotten a huge advantage by creating the new laws which are created by the new government.
At the same time when there is any problem with selling such materials in some countries the banned or illegal matter would be mixed in any of the business product, which also create a strong problem for such businesses.
Most people’s confused about economic analysis and statistical analysis in the public market, so let’s jump into the key difference between in it anyway.
3: economic analysis vs statistical analysis
The key difference between economic analysis and statistical analysis is, that economic analysis is the one that elaborates the concept of using the idea of researching the company to determine whether it had any money matter impact problem from the outside of the business.
The statistical analysis shows the research for receiving the fixed income or dividends or interest from any of the securities in the market based on the probability.
So the key difference between economic analysis and statistical analysis is economic analysis focuses on the money matter of a country, and statistical analysis focuses on the money matter of fixed income based on chances.
To make you more clear about the economic analysis, let’s see one clear example below.
4: example of economic analysis.
Say that you and your friends in the investment Securities, you and your friend bought the same stocks of company J based in different ways.
You had purchased the company J Shares based on how well the company J protecting himself from the money matter of government and public external activities.
And you purchased the company J shares based on how well such an Industry pays consistent dividends for holding such stock.
Here your research shows the economic analysis and your friend’s research demonstrates the statistical analysis.