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Basics of Stock Investing

Fundamental Analysis

What is Fundamental Analysis and stock investing all about?

Fundamental Analysis is a technique which attempts to determine a security's value by focusing on underlying factors that affect a company's actual business and its future prospects. It refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements.


Fundamental Analysis Involves:

  • Gathering, analyzing, interpreting company, industry & economic information
  • Completely analysing a company's financial statements and finding out their implications
  • Performing a bias free valuation in order to come up with a fair value (intrinsic value) of a stock and see whether it is under or overvalued.

What are the Goals of Fundamental Analysis?

  • To determine the fair value of a company.
  • To evaluate management integrity and internal business decisions

For whom Fundamental Analysis is relevant?

Fundamental Analysis is relevant for -


  • Long term investors
  • Fund managers
  • Financial advisors
  • Value Investors

Primarily there are two factors through which fundamental analysis are made- Qualitative & Quantitative. We will go through each of them in the upcoming units.  

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Units 2/10