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Economic Analysis

Economic Analysis. Real Growth. Inflation. Budget Balance. Trade Deficit. Foreign debt. PE… another way to look at the required rate of return. Intrinsic value (no growth)=EPS o /R =EPSo x PE PE ↔ EP Thus EP  R or PE 1/R

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Economic Analysis

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  1. Economic Analysis

  2. Real Growth

  3. Inflation

  4. Budget Balance

  5. Trade Deficit

  6. Foreign debt

  7. PE… another way to look at the required rate of return • Intrinsic value (no growth)=EPSo/R=EPSo x PE • PE ↔ EP • Thus EP  R or PE 1/R • Duh, think about it …EP…earnings to price…return on investment  this is a return! • You can do the same analysis with PCF • Macrofactors as determinant of PE? • Crystal Ball PE using Macrofactors…

  8. Composite rating

  9. Economic Rating

  10. Financial Rating

  11. Political Rating

  12. Real GDP Growth

  13. Budget Balance

  14. Current Account

  15. Inflation

  16. Foreign Debt

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