MAKING INFORMED DECISION ECONOMICALLY.
Systematic and well-designed way of determining the maximum use of a scarce resource is what can be called economic analysis, this will have to involve comparing two or more alternative in order to achieve a certain objective obviously under some given 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.
So as not to lose much after acquiring a certain resource there are some factors that one has to consider in order to make sure that the decision that he will take will resonate to the cash he will invest. Almost everywhere in the current world, politics determine much on how well the economic environment is, therefore before investing it is good to ensure that the country you need to acquire that scarce resource is politically stable for a smooth leaning of economy.
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. This information will help any investor who wishes to say start a company or even buy an existing one, He will be able to make an informed decision on when to do that though in most cases the appropriate time to purchase is during the early years of the company. Numbers don’t lie therefore when making economic analysis decision it is good to know company ratios since they will help you figure out when and how they are performing in ascertain way at a given time period. 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. 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. Finally it is very good to note that it may be wise as an investor not to take any investment without first analyzing the ratios of the said company.