The document introduces the EIC model for security selection. The EIC model analyzes the economy, industry, and company. For economic analysis, it evaluates whether an economy allocates resources effectively by comparing alternatives and opportunity costs. Industry analysis uses Porter's five forces model to examine threats, suppliers, industry structure, and demand/supply conditions. Company analysis identifies attractive companies by assessing financial performance, efficiency, capital structure, and competitive edge using value and growth approaches.

1. EIC MODEL
P R E PA R E D A N D P R E S E N T E D BY :
M O H A M M A D R A H M AT U L L A H
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2. COVERED AREA
• Introduction to EIC Model
• Economic Analysis
• Industry Analysis
• Company Analysis

3. INTRODUCTION TO EIC MODEL
• abbreviation of economic, industry, and company
• Used in security selection process
• most attractive industries in the light of the economic conditions
• most attractive companies within the attractive industries are pointed out by the
analyst

4. ECONOMIC ANALYSIS
• whether economic entity is allocated most cost-effectively or not
• involves comparing at least two alternatives
• factor in the opportunity costs
• Study of economic systems
• Analyzing the economic aspects
• growth rate of GDP, industrial growth rate, inflation, interest rate

5. INDUSTRY ANALYSIS
• Michael Porter proposed a standard approach to industry analysis
• Threats of new entrants evaluate the expected reaction
• bargaining power of suppliers has influence on the profitability of the company
• industry structure should be to estimate the future trends
• demand and supply conditions in the industry
• government policy

6. COMPANY ANALYSIS
• different companies are considered to identify better ones
– Value Approach to Investing
– Growth Approach to Investing
• financial performance, operating efficiency, capital structure, competitive edge of the
company

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