Q17.

What are the factors to be analyzed under fundamental analysis

Ans . Under fundamental analysis, several factors are analyzed to assess the value and prospects of a
security. Here are some key factors:

1. Financial Statements: Analyzing the company's financial statements, including the income statement,
balance sheet, and cash flow statement, helps evaluate its revenue, expenses, assets, and liabilities.

2. Earnings and Profitability: Assessing the company's earnings growth, profit margins, and return on
investment provides insights into its profitability and overall financial health.

3. Valuation Ratios: Examining valuation ratios such as the price-to-earnings (P/E) ratio, price-to-sales
(P/S) ratio, and price-to-book (P/B) ratio helps determine whether the security is overvalued or
undervalued.

4. Industry Analysis: Understanding the dynamics and trends of the industry in which the company
operates helps evaluate its competitive position and growth potential.

5. Management and Governance: Assessing the competence and track record of the company's
management team, as well as its corporate governance practices, provides insights into its ability to
make sound decisions and create value for shareholders.

6. Competitive Advantage: Analyzing the company's competitive advantages, such as strong brands,
patents, or unique market positioning, helps assess its ability to maintain a sustainable edge over
competitors.

7. Economic and Market Conditions: Considering macroeconomic indicators, market trends, and
regulatory factors helps understand the external environment and potential impact on the company's
performance.

8. Growth Prospects: Evaluating the company's growth potential, including expansion plans, new
product launches, or entry into new markets, helps assess its ability to generate future earnings and
value.

9. Dividends and Shareholder Returns: Analyzing the company's dividend history, dividend payout ratio,
and share buyback programs helps evaluate its commitment to returning value to shareholders.

By analyzing these factors, investors can gain a comprehensive understanding of the company's financial
health, competitive position, and growth prospects, enabling them to make informed investment
decisions.

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