Describe the firm’s economic environment and evaluate how this has impacted historic firm
performance and is likely relevant to future performance.
1. Look at the Global economy over the last 5 years – what has been going on? What is
predicted to happen?
2. Look at individual economies that affect your firm also for the last 5 years – what has
been going on? What is predicted to happen?
3. USE REAL DATA!!! Not “the economy is good/bad” language
4. Analyse at least:
a. GDP
b. Inflation
c. Cost of debt
2. Industry Analysis
Perform an industry analysis and evaluate the level of competition in the industry or
industries that your firm operates in.
1. Use Porters Five Forces (all of them) to analyse each of your industries
2. USE DATA
3. Form a conclusion for each force, and for the industry overall (that is, the level of
competition is high/moderate/low)
3. Business Strategy Analysis
Identify the key success factors and the key risks of the firm’s strategy. Discuss the
sustainability of profits generated by the strategy
1. Identify the key success factors
2. Identify the key risks (don’t just list the ones that your company tells you)
3. What will happen in the future for your business? (sustainability)
4. Accounting Analysis
Assess the degree to which the firm’s accounting reflects the underlying business reality.
Identify any accounting distortions and evaluate their impact on profits and the sustainability
of profits.
1. Use the 6 steps discussed in class (and in your text book).
2. If you find anything and note it in step 5, you MUST fix it in step 6
3. There is every likelihood that you will find nothing! (audit!!)
Individual

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