Industry Analysis Template

A suggested structure for an industry analysis memoSector overview and key players

1. Industry overview and key players
   1. Breakdown of key sectors within the industry (by revenues) and their associated business models (i.e. – how do they make money?)
   2. For each sub-sector:
      1. Key players
      2. Key financial statistics: market cap, total sales, operating and net profit, margins, risk (beta), recent 5-year equity returns (ROE, ROIC), as well as valuations (P/E, P/S, P/B and EV/EBITDA ratios)
      3. Sector potential short and long term consensus growth rates
2. Industry features
3. Sensitivity of sales to the business cycle; Industry life-cycle stage
4. Operating leverage
5. Financial leverage
6. Industry structure: threat to entry, rivalry between existing competitors, pressure from substitute products, bargaining power of buyers, and bargaining power of suppliers 
7. Operating environment: regulatory, political, social, environmental and product risk, trade issues, exchange rate sensitivity, and impact of consolidation and globalization 
8. Industry Trends & Market Outlook for the next 12-36 months? (e.g., how would strong dollar, rising rates, rising commodity costs, or increasing legislation impact the sector?)
9. Key Financial & Valuation Metrics—Sector specific characteristics (e.g., same store sales for retailers)
10. Recommendations—Should SIF 2021 overweight or underweight this sector in the next 12-36 months?