The most important thing in choosing an industry is how to predict it correctly.

Investors need to know the answers to these two questions first.

First, what is the historical growth of the industry?

Two, what is the trend of its future growth?

Then, investors are more concerned about the industry's sales and revenue growth in the past, and how the performance compares with the growth of gross national product (or other related statistics, such as national income). After considering all these circumstances, investors are particularly interested in understanding the relationship between industry growth and GDP growth.

Because some industries are growing synchronously with the national economy, and some industries are growing faster, which provides investors with the best.

At the beginning of the analysis step, a sales index is set up to compare a representative base year with other years and to represent sales by percentage.

For example, the annual sales volume is 200 million yuan and the sales volume is 250 million yuan in 1996. The sales index in 1996 is 1.25 x 100%=125%.

If this index is compared with GNP, it can show the corresponding relationship between the growth of a certain industry and the growth of GNP, or the sales index as well as other nationals.

Compound regression analysis refers to the analysis of the influence of several variables on the interaction of certain items.

Computers are often used to build regression lines.

Standard - Pool Co used this analysis procedure in industrial investigation.

The exponential form established by regression analysis provides an important information for industry analysis, which can express the growth rate of an industry by absolute number and relative number (relative business index).

The stability of this growth can also be estimated. It shows the cycle of the industry and predicts future growth.

In the analysis process, the selected enterprises and periods are very important.

Because they will represent an industry.