What is Fundamental Analysis?

30, Sep 2021

In simple words, fundamental analysis is the evaluation process of analyzing a business at an utmost basic or fundamental financial level. For example, key ratios of the business are examined to determine its financial health.

Also, this analysis can provide a sense of the value in regards to what’s the company stock predicted to trade, depending on the approximate appraisal of similar companies. It takes into account several factors such as revenue, asset management, business yield, interest rates, etc.

Fundamental analysis is the study of underlying factors that can influence the worthiness of the economy, industries and companies. It aims to derive anticipations and profit from forthcoming price movements.


For example, at an organizational level, the fundamental analysis includes investigation of financial data, management, business knowledge and rivalry. At the industrial level, an examination, on supply and demand forces for offered products, is conducted.



In accounting and finance, fundamental analysis is the method of determining the intrinsic value of a security by examining many microeconomic and macroeconomic factors. Aiming to quantify the intrinsic value of a security that can be correlated with the current market price to assist in making investment decisions.

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