Top-Down

Analysis
GROUP 1

Alfatira Gema / 195020419111001

Sukma Tri Kusuma Wardhani /
195020407111010
M. Aji Prasetyo / 195020501111005
Rosalinda / 175020407141007
 04. MICRO COMPANY
ANALYSIS
01. Top-DOWN ANALYSIS

05. QUALITATIVE
02. MACROECONOMIC ANALYSIS
ANALYSIS

03. SECTORAL ANALYSIS

 TOP-DOWN
ANALYSIS
Top-down analysis is a critical
adjunct to fundamental analysis,
helping to make sure investing in the
right companies for the right price at a
good time.
Top-Down analysis is the
analysis that looks at the "big picture"
first for decide the investment idea and
choosing the stocks.
 Elements of Top-Down Stock Analysis

Macro Analysis
Investors can assess the health  Sector Analysis
of the global economy by
analyzing the gross domestic
Macro trends can be identified by
product (GDP) of both
looking at specific area of country
developed and emerging economy that shows the sign of the
markets. strong country economic growth. And
after the investor can be identify the
macro trend, they can immediately
analyze the sectors that can give benefit
for them.
 Elements of Top-Down Stock Analysis

 Microeconomics Qualitative Analysis

Analysis
A mix of fundamental and
technical analysis can
help decide what stocks
to buy.
Analysis that refers to
aspects of public company that
are not quantifiable or can be
explained by numbers.

Technical analysis in the

top-down analysis is
used to get a more
comprehensive view of a
security’s price action.
MACROECON
OMIC
ANALYSIS
 MACROECONOMIC ANALYSIS

In this macro analysis,

investor measure the health
of global economy with GDP.
Strong GDP means the The investor also
economy is performing well. have to consider
the geopolitics
risk to make sure
its safe to invest.
MACROECONOMIC ANALYSIS

Example
An investor looking at Asia may use a
GDP and GDP growth filter to find
countries in Asia with two years of
growing GDP but a total GDP in the
bottom 20 for the region in order to
find emerging market stocks.
SECTORAL
ANALYSIS
• Definition

• Reason for learning!

• Return vary across industry throughout the business cycle
• Cross-sectional analysis & time series analysis
• Predict future trends
It involves using many observations
from individual companies across the
industry for the same time period

Research shows a wide dispersion

in rates of return in different industries

Performance varies from year to

year
Peak

Expansion

Contraction

Through

Sector Rotation
FIGURE 13.1 Technology and transportation leadership during 2003
fits Early Expansion phase.
It involves using many observations from different
time periods for the same industry or group of
companies

Research shows that there is almost no association

in individual industry performance year to year or over
sequential rising or falling markets

Variables that affect industry performance change

over time
MICRO COMPANY
ANALYSIS
• Definition of Micro Company Analysis

Micro-fundamentals analysis includes

analysis of company's financial ratios.
Robert Ang (1997) classifies these
financial ratios into 5 types:
• Liquidity ratios,
• Activity ratios,
• Profitability ratios,
• Solvency ratios
• Market ratios.
• Current ratio (CR) = Liquidity Ratios
• Debt to Equity Ratio (DER) = Solvency Ratio
• Return on asset (ROA) = Profitability Ratios
• Total Asset Turn Over (TATO) = Activity Ratios
• Earning Per Share (EPS) = Net Income also company’s profitability
• Price Earning Ratio (PER) = Market ratios.
• Price Cash Flow Ratio (PCFR) = Market ratios.
• Price to Book Value (PBV) = Market ratios.
Examples of Company Balance Sheet Financial Statements
Stock Screener
Chart
QUALITATIVE
ANALYSIS

Qualitative analysis is the analysis

that refers to aspects of public
company that are not quantifiable or
can be explained by numbers.
 QUALITATIVE ANALYSIS

01 02
business model competitive advantage in
the industry

03 04
management and Satisfying the customer,
corporate governance. rewarding employees and
maintaining excellent
supplier relationships
 QUALITATIVE ANALYSIS

Employee Satisfaction
Supplier Satisfaction

Customer Satisfaction
 SUMMARY

The conclusion is top-down analysis is such analysis that

critical adjunct to fundamental analysis, helping to make sure
investing in the right companies for the right price at a good
time. This top-down analysis start with the wider scope and
going down detail to decide final decision of investment. The
elements of top-down analysis include:
● Macroeconomic Analysis

● Sector Analysis

● Micro Company Analysis

● Qualitative Analysis
 THANK
YOU
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