Fundamental Analysis

Fundamental analysis involves looking at a range of factors like the company’s financial statements, management team, and its competitors. Such a wide range of parameters helps evaluate a stock and help decide whether it is worth buying or adding to a portfolio.

A company’s financial statements have many numbers and details that will require assessing. For an investor just starting, it is easy to get confused and give up. It is easy to focus on a few key parameters to evaluate the stocks you may shortlist as potential purchases.

Revenue Operating revenue Non-operating revenue Net income Earnings and Earnings per Share (EPS) Price-earnings ratio (P/E) Price-To-Book (P/B) Ratio Price-to-Earnings Growth (PEG) Ratio Dividend Yield

Investing in stocks requires both patience and practice. Assessing and evaluating stocks is a science and experience, and even seasoned investors make mistakes at times. Out of all the ratios listed above, the P/E, P/B, and the PEG are considered more reliable.

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