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Friday, 18 May 2012

Fundamental Analysis of a Company

Fundamental Analysis the cornerstone of investing.
Fundamental factors can be grouped into two categories.

1.Quantitative Analysis
Quantitative analysis is capable of being measured or expressed in numerical terms. The biggest source of quantitative date is the financial statements. You can measure revenue ,profit,assets and more with great precision.
I have already posted about financial statements


 2.Qualitative Analysis
Qualitative Analysis is related to or based on the quality or character of something.Qualitative fundamentals are the less tangible factors surrounding a business, Things such as the quality of a company's board members and executives,its brand-name recognition patents or proprietary technology.

 Neither qualitative nor quantitative analysis is inherently better than the other. 
Take the coca-cola company for example. When examining its stock, an analyst might look at the stocks annual dividend payouts,earnings per share, P/E ratio and many other quantitative factors. However, no analysis of coca-cola would be complete without taking into account its brand recognition.

2 comments:

Dr.B.M.SHARMA dr.sharma said...

Nice to read your profile and your blogs which you write. Not now. After sometime, i shall be reading all and give my comments the way i understand economics, finance and economy and economic affairs. Prima facie you have to be much deeper in analysis of data..regards.

worldknowledge said...

Thank you....I will

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