FUNDAMENTAL ANALYSIS

Definition
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´Fundamental Analysis is a tool to evaluate the Underlying Assets for making Investment in order to get High Returnsµ. Stocks Commodities(Gold) Currency's (Forex) 

 

Fundamental Analysis of Stocks ´It·s a systematic way to find out the future value of a Share valueµ. nothing but Intrinsic valueµ.

Intrinsic Value:
The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value.

Steps in Fundamental Analysis

Economy Analysis

Industry Analysis

Company Analysis

Approaches to Analysis
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Top-Down Approach ´Market to Individual Stocksµ

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Bottom-Down Approach ´individual companies can do well even in an industry that is not performing very wellµ.

TOP-DOWN
Economy Analysis

BOTTOM-UP
Economy Analysis

Industry Analysis

Industry Analysis

Company Analysis

Company Analysis

Economy Analysis
GDP y Inflation y Physical Policy y Monetary Policy y Political Stability(In & Out) y Exchange Rates y Un-Employment Rate y Balance Of Payments(Economic Stability)
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Industry Analysis
Industry Life Cycle y Product Life Cycle y Study of the structure and characteristics of an Industry. y Analysis of Profit Potential Industries(Porter·s Five force Model)
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Company Analysis
Company Analysis

Quantitative Factors

Qualitative Factors

Qualitative Factors
Management y Ownership and Insider Sales y Competitive Advantage y Business Model y Corporate Governance
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Quantitative Factors
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Analysis of Financial Statements 
Profit & Loss Account ´it explains the profits and losses between the two particular Periodsµ. Balance Sheet ´it explains the Overall Assets and Liabilities that a Company Possess for a Particular Year Endµ. Cash Flow Statement ´It explains In and Out Flow of Cash into Company through Different Activitiesµ.

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Ratio Analysis is the Important tool that will evaluate the Financial Health of a Company. 
       

Debt Equity Ratio EPS P/E Ratio Dividend Yield Ratio Dividend Payout Ratio Return on Equity Return on Investments Return on Sales Working Capital Ratio

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