Fundamental Analysis

Fundamental analysis img

Fundamental Analysis of stocks is a technique that is helpful in making investment decisions on the basis of the fundamentals of the company. Its basic importance lies in determining the Intrinsic Value of the security. It can then be compared to the current stock price and determined if the stock is overvalued or undervalued.

Calculation of Intrinsic Value is done by studying all the things that can influence this value such as the Company's Financial and Management Condition, that of the sector, and the overall economic conditions.

Here are 5 steps that you need to follow to analyse the fundamentals of a company in the Indian stock market:

  • Use the Financial Ratios for initial screening.

  • Understand the Company

  • Study the Financial Reports of the Company

  • Check the overall debt of the Company.

  • Find the Company's competitors and their impact on the sector.

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