Though the basic principles of fundamental analysis do not vary, it is what one is measuring that will determine how broad the analysis needs to be. There are three major types of fundamental analysis. Equity or Stock Analysis is covered in the section below.
In the course of making a fundamental analysis of the stock, an investor looks at the health of the issuing company. He considers financial statements-whether the company is healthy, having sound balance sheet, income statement, and cash flow, its competitive standing in the industry, trend in the industry, quality of management, as well as the general conditions prevailing in the market. The major areas that get analyzed usually pertain to measures like growth in earnings, dividend yields, and ROE.
This basically is the technique of fundamental analysis, which works to figure out the intrinsic value of a financial asset. In other words, it may involve a stock or a bond. It determines how much of that asset is worth in terms of its fair pricing as compared to the market value. This type of analysis deals with qualitative as well as quantitative factors, and it may even incorporate financial statements related to a firm, the firm's management, its competitive position, the manner in which an industry performs, and other general conditions of the economy.
In equities, this fundamental analysis becomes more concentrated for getting an idea of the company issuing that stock of its financial soundness and the probable growth prospect.
For other securities like currency, commodity, or bond, it becomes centered to an analysis of macroeconomic parameters, supply and demand conditions, and political forces.
This basically is the technique of fundamental analysis, which works to figure out the intrinsic value of a financial asset. In other words, it may involve a stock or a bond. It determines how much of that asset is worth in terms of its fair pricing as compared to the market value. This type of analysis deals with qualitative as well as quantitative factors, and it may even incorporate financial statements related to a firm, the firm's management, its competitive position, the manner in which an industry performs, and other general conditions of the economy.
In equities, this fundamental analysis becomes more concentrated for getting an idea of the company issuing that stock of its financial soundness and the probable growth prospect.
For other securities like currency, commodity, or bond, it becomes centered to an analysis of macroeconomic parameters, supply and demand conditions, and political forces.
In fact, the foundation upon which investment research and decision making lies is, one of the wide-deployed usages in finding intrinsic value; fundamental analysis from stocks to commodities, bonds or even the economy as a whole, which judges intelligently just what investment an investment really stands for versus what one must pay. Whereas technical analysis relies upon data from the market, which particularly refers to price and volume, fundamental analysis is quite unlike that as a method of analyzing whereby one is purported to be exploring the intrinsic cause for which something will move due to its true worth.
In this book, several concepts associated with the issue at hand and concerning fundamental analysis-theory basis, prime measurements, means of expression-instruments and what applies to make investment decisions – are offered herein.
In fact, the foundation upon which investment research and decision making lies is, one of the wide-deployed usages in finding intrinsic value; fundamental analysis from stocks to commodities, bonds or even the economy as a whole, which judges intelligently just what investment an investment really stands for versus what one must pay. Whereas technical analysis relies upon data from the market, which particularly refers to price and volume, fundamental analysis is quite unlike that as a method of analyzing whereby one is purported to be exploring the intrinsic cause for which something will move due to its true worth.
In this book, several concepts associated with the issue at hand and concerning fundamental analysis-theory basis, prime measurements, means of expression-instruments and what applies to make investment decisions – are offered herein.