involves examining the economic, financial and other qualitative andquantitative factors related to a security in order to determine its intrinsic value. Fundamentalanalysis is the study of economic, industry and company¶s stock.
At the company level, fundamental analysis may involve examination of financial data,management, business concept and competition.
At industry level, there might be an examination of supply and demand forces for the product offered.
For the national economy, fundamental analysis might focus on economic data to assessthe present and future growth of the economy.Steps to fundamental analysis:The most common way that fundamental analysis can be done is ³three steps process´:Economic analysis:- the first step to this type of analysis includes looking at macroeconomicsituation. This includes GDP, growth rates, inflation, interest rates, exchange rates, productivityand energy prices.Industry analysis:- This includes total sales, price levels, competition and their effects, foreigncompetition as well as any entrances or exits from the industry.Company analysis:- This includes at unit sales, prices, new products, earnings and chance of debtor equity occurring.
GDP (Gross Domestic Product)
After almost 7% growth in 2008/09 fiscal year, in the first three months of 2010 India's economyexpanded 8.6% boosted by industrial production and services. But, is the third largest economyin Asia able to keep its high rate of growth?
2004 2005 2006 2007 2008 2009 2010
8.30% 6.20% 8.40% 9.20% 9.00% 7.40% 8.60%