Best Business and Loans Resources » bonds http://www.profit-managing.com Manage your credit easily and efficiently Fri, 14 May 2010 08:28:49 +0000 en hourly 1 http://wordpress.org/?v=3.0 Credit and economic changes of industries /credit-and-economic-changes-of-industries/ /credit-and-economic-changes-of-industries/#comments Tue, 27 Oct 2009 17:03:38 +0000 admin http://www.profit-managing.com/?p=114 Structural economic changes of industries are important in the sector selection process for corporate bond investors because they determine how an industry functions and will allow to make projections about the development of the credit quality of specific industries. It has to be determined whether certain changes in industry dynamics occur which have a material effect on the evolution of the industry structure. Examples of some driving forces for change are:

  • Long-term changes of growth patterns
  • Changes in the customer base (demographics)
  • Changes in production costs
  • Product innovation
  • Changes to production processes
  • Structural changes of supplementary industries
  • Changes of government policy
  • Exits and new competitors.
]]> /credit-and-economic-changes-of-industries/feed/ 0 Industries with structural credit losses /industries-with-structural-credit-losses/ /industries-with-structural-credit-losses/#comments Mon, 26 Oct 2009 16:43:24 +0000 admin http://www.profit-managing.com/?p=112 Industries with structural losses have to be avoided because their profits will fall in recession and recovery as well. Defensive industries with structural gains will experience a rise in profits during the whole economic cycle.

Industry trends have to be monitored and projections about future trends have to be made because they will influence the profitability of an industry. Some major industry characteristics are:

  • Pricing and cost structures (evolution over time)
  • Domestic and international competition
  • Technological change (pace and adaptability)
  • Asset values
  • Upcoming financing needs
  • Potential liabilities
  • Political and regulatory environment
  • Government support
  • Current state of regulation/deregulation.
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