Business

How does the fundamental analysis play a vital role in trading?


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SARAVANAKUMAR. M


Jan 22, 2024, 8:22 PM

1. An Overview of Fundamental Analysis
The chapter provides an overview of fundamental analysis, an all-encompassing method for researching and evaluating businesses. Since the stock prices of a fundamentally sound company tend to be high, a fundamental perspective is crucial.

2. An Investor’s Mentality
A perceptive examination of the foundations of fundamental analysis and how it can be divided into qualitative and quantitative components in order to determine the stock’s intrinsic worth. comprises precise comprehension as well.

3. How to Interpret a Company’s Annual Report
The chapter provides an overview of the fundamental organisation of a typical annual report. It walks you through each section and explains what to look for when you skim through it.

4. Part 1 of Understanding the P&L Statement
The Profit and Loss Statement’s general content and format are covered in this chapter. Specifically, we examine the revenue side of the profit and loss statement in detail in this chapter.

5. Getting to Know the P&L Statement (Part 2)
By examining the annual report of a listed firm, the chapter illustrates the structure and content of the expense side of the profit and loss statement. The notes and timetables that go with it are also analysed.

6. Comprehending the Balance Sheet (Part 1)
Information regarding the standard balance sheet structure is covered in this chapter. We specifically examined the liability side of the balance sheet in this chapter.

7. Part 2: Comprehending the Balance Sheet Statement
This chapter expands on the previous one by explaining the idea of the asset side of a typical balance sheet.

8. The statement of cash flow
An overview of the major elements of the cash flow statement and their analysis are covered in this chapter. explains the relationship between the cash flow, profit and loss statement, and balance sheet as well.

9. Part 1 of the Financial Ratio Analysis
We covered the use of financial ratios to analyse financial statements in this three-part series. We examined the profitability ratios in this chapter, which show how profitable the company is.

In the second part of the series, we learn about the various leverage ratios, which help us study the company’s debt with respect to the company’s ability to service the debt. We also look into the key being opened.

11. The Financial Ratio Analysis (Part 3)

In this concluding chapter, we look at valuation ratios such as price to sales, price to book, and price to earnings and their attractiveness from an investment perspective.

12. The Investment Due Diligence

The chapter deals with understanding the basic steps required when it comes to conducting investment due diligence. The chapter discusses ‘Moats’, which is a very crucial aspect when it comes to trading.

13. Part I of Equity Research
The chapter covers how a layperson might do limited resource equity research. A simple yet effective checklist is presented to aid in the process of selecting investment-grade businesses from a broad.

14. DCF Foundation
Understanding the time value of money idea and how to use the DCF model to estimate a stock’s price are the main topics covered in this chapter. We can arrive at the preset thanks to the DCF analysis.

15. Part 2 of Equity Research
Recognise and explain the meaning of free cash flow. An analysis of how free cash flow and a stock’s total net present value are used to calculate a share price…

16. The Conclusion
An awareness of the disadvantages of the DCF analysis as well as a discussion of the margin of safety idea. Here are some tips for maintaining and adjusting your stock portfolio.

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