Question

Provide 5 examples of what you would hope to find/learn in a Fundamental Analysis before investing in a company

Answer 1

The process of evaluating security for forecasting its future price is called as fundamental analysis.

Based on this analysis we can decide whether to invest in a particular company shares or not.

Actually it is based on estimates for example

1) Company press releases,

2) Political conditions,

3) Competitor policy analysis,

4) Industry in which company operating.

If the above indicators have bad impact on the company, it will automatically impacts the share price of the company.

The five examples to learn in a fundamental analysis of the company are

1. Earning per share

2. P/E ration i.e. Price to earning ration

3. P/B ration i.e. Price to book ratio

4. Return on equity

5. Beta.