Final answer:
A top-down analysis of a firm's prospects starts with an analysis of the industry.
Step-by-step explanation:
A top-down analysis of a firm's prospects starts with an analysis of the industry. This involves examining the overall conditions and trends in the specific industry in which the firm operates. By understanding the industry dynamics, such as market size, competitive landscape, and regulatory environment, analysts can make informed assessments of the firm's potential for success.