Understanding the importance of PE Ratio & Doubt Clearing Session on Foundation of Capital Market
Every business can be fundamentally analysed on the basis of 9 criteria given by the Piotroski Score. These criteria are explained in the above video, which will help you identify leading stocks.
A balance sheet is a financial statement of a company which summarizes company's assets, liabilities and shareholders' equity at a point in time. These three segments give investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. In simple words, it is a snapshot of your business financial position.
Read the full article here: How to Analyse Financial Statements of a Company?
Financial Modelling involves modelling financial data for decision making. Financial Modelling Skills are applied to variety of scenarios like equity research, project finance, mergers and acquisitions etc. Check out more about Financial modeling and its valuation for better understanding.
Know about the Annual Report apart from the three fundamental financial statements a fundamental analyst also analyzes other important aspects of information to properly analyze the fundamentals of the company. The Fundamental Analyst looks at notes to financial statements,independent auditor's report and the accounting policies of the company.Notes to accounts provides detailed descriptions of the different accounting heads of the different financial statements.Accounting policies are the rules,regulations and conventions which the company followed at the time of preparing the financial statements.Independent Auditor's Report is the report of the financial statements of the company by a set of independent auditors.
Read the full article: Why we should read Annual Reports?
Porter's Five Force Analysis and SWOT Analysis analyzes the fundamentals of a company.Porter's Five Forces are Bargaining Power of the suppliers, Bargaining Power of the buyers Threat of substitutes Threat of new entrants and Industry Rivalry. Bargaining power of suppliers and buyers deals with the power of buyers and suppliers. Industry Rivalry deals with the intensity of competition.The remaining forces deal with threat of new competitors and substitute products .SWOT Analysis on the other hand analyzes the strengths weaknesses opportunities and threats faced by a company.
Check the Equity Research Analysis course for better understanding of Porter's Five Force model.
There are two different factors of fundamental analysis: Qualitative and Quantitative factors. The qualitative factors are Business Model Competitive Advantage, Management and Corporate Governance, while the quantitative factors are Industry growth Customers Financial Statements and Competition.
The qualitative factors are analyzed to answer questions about the business profile, product profile, price profile, the base of its competitive advantage quality and effectiveness of its management; how far is is the shareholder's interests safeguarded. The quantitative factors are analyzed to know about the growth prospects, level of competition size of the customers and the financial statements.
Check the Fundamental Analysis Course for better understanding.
The three major categories of factor that influences the price of a share are sentiments, liquidity and the fundamentals of a company. Fundamental Analysis can be defined as the analysis of the fundamentals of the company to determine the intrinsic value of the company's stock. It analyses a number of factors such as business model of the company its competitors the industry financial statements etc to determine the intrinsic value of the stock of the company. Equity research uses this intrinsic value to buy or sell shares. If the intrinsic value is lower than the market price the stock is bought and vice-versa. Read the full article: Why Fundamental Analysis is Important?