Importance Of Fundamental Analysis While Selecting A Stock For Investment

1. Importance Of Fundamental Analysis While Selecting A Stock For Investment https://www.youtube.com/c/VishnuAgarwall

2. Defination Of Fundamental Analysis • Fundamental analysis is a technique for analyzing the intrinsic value of a stock • It includes the financial statements, external influences, events, and industry trends • It is a very important procedure to determine the financial and business health of a company • This analysis will encourage you to identify key attributes of the company and analyze its actual worth, taking into consideration macro and microeconomic factors  • Fundamental analysis of a stock is a very important procedure to determine the financial and business health of a company. So, it's recommended to perform a complete fundamental analysis of the stock before investing if you are planning for a long-term investment https://www.youtube.com/c/VishnuAgarwall

3. How To Do Fundamental Analysis!!- Financial Ratios For Initial Screening • Use the financial ratios for Initial Screening • it's better to shortlist a few good companies based on a few criteria and then review these screened companies one by one to pick the one that suits you the best. • For initial screening of the stocks, you can utilize these various financial ratios such as Price to Earnings (PE) ratio, Price to Book Value (PBV) ratio, ROE, CAGR, Current ratio, Dividend yield, and many more. Here Are Some Key Formula: P/E = Share Price ÷ Earning per share P/B = Market Price Per Share ÷ It’s book value per share ROE (return on equity) = Net Income ÷ Shareholder’s Equity CAGR = Compound Annual Growth Rate Current Ratio = Company’s Current Assets ÷ Company’s Current Liabilities Dividend Yield = Annual Dividend Per Share ÷ Current Share Price Dividend Yield Ratio = Dividend per share ÷ Market value per share ÷ https://www.youtube.com/c/VishnuAgarwall

4. How To Do Fundamental Analysis!!- Understand The Company • To Know the company properly you need to do the followings: • To visit company’s website to check it’s product, about promoters / us etc • To look for the latest annual report, if possible, and download to study the balance sheet & P/L • To read the mission & vision statement of the company, that they have mentioned on their website, and try to understand how appealing they are • Examine the financial results of the company, like Balance Sheet, P&L statement, cash flow statements • Generally, if the revenue/sales, net profit, and margin increase over the last five years, then it's considered to be a healthy sign for the company. After this, you are also required to check the other financials such as operating costs, expenses, assets, liabilities, etc. https://www.youtube.com/c/VishnuAgarwall

5. How To Do Fundamental Analysis!!- Check the Debt and Red Flags • The total debt of a firm is one of the significant factors to check before investing in a stock • Better to avoid firms with huge debts • To invest in companies with a debt/equity ratio of less than 1 • Other red flags in the firm can lead to continuously decreasing profit/ margin, low liquidity, and pledging of shares ÷ https://www.youtube.com/c/VishnuAgarwall

6. How To Do Fundamental Analysis!!- Find the company’s competitors • To make sure to determine what this company is doing that its competitors aren’t • Unique selling points (USP) of the company, Competitive advantage, Low-cost products, Brand Value, prospects in terms of competitors • To do a google search to find the competitors of the company and study the competitors in detail before investing How To Do Fundamental Analysis!!- To Analyse prospects • Most of the good investments are based on the coming aspects/potential of the company and barely on their current situation • To analyse the prospect of the company, before investing, the best way to understand the prospect of the company is to do the fundamental analysis of the company https://www.youtube.com/c/VishnuAgarwall