Please explain Fundamental analysis of stock? Please explain the the terms used in fundamental analysis with example

I m newbie to share market, can you please explain fundamental analysis of stock in detail with example and terms involve in this? 

Depending on what factors we can select a stock for long term and short term ?

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Sai, FA is a slightly lengthy topic to explain here.

However you can get some pointers to get started here…

http://tradingqna.com/1329/investor-determine-investing-company-available-exchanges?show=1329#q1329

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As a basic, you could look into the following factors to filter or eliminate most of the companies to invest

  • Total Debt of the company
  • Closing Cash and Cash Equivalents
  • Net Yearly Profits/Loss
  • Shareholding pattern - Percentage of Promoter shares already pledged.

If debt is very high compared to profits earned. If the company even settle the debts in 2 years time, filter the company out.
A company having good closing cash equivalent will likely not let its share price fall.
Year on Year profits should be in increasing trend
If the promoter shares are not pledged, it is better.

P.S:Courtesy>>Manikandan

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Abbo, thum Chakravyuh(#Value Investing) mein entry marna chahthe ho!

Chakravyuh bedh karne khe liye thume, Abhimanyu se Pandav Arjun banna padega!

#Value Investing

Thank you kartik. I have searched in net for FA but I did’t find any good link with examples. If you find any good link with detailed explanation and example please post

Stay tuned, Zerodha may just be of help :slight_smile:

Fundamental analysis evaluates a company’s financial health and intrinsic value by analyzing factors like earnings, growth potential, and industry trends. Key terms include:

  1. Earnings Per Share (EPS): Measures profit per share.
    Example: ₹10 crore profit with 1 crore shares gives ₹10 EPS.
  2. Price-to-Earnings Ratio (P/E): Shows how much investors pay per rupee of earnings.
    Example: ₹200 stock price with ₹10 EPS gives a P/E of 20.
  3. Debt-to-Equity Ratio (D/E): Assesses financial leverage.
    Example: A ratio of 0.5 indicates ₹0.50 debt for every ₹1 equity.
  4. Return on Equity (ROE): Measures profit efficiency.
    Example: ₹5 crore income on ₹25 crore equity gives 20% ROE.

To learn fundamental analysis of stocks in detail, explore courses offered by Elearnmarkets that simplify stock analysis for better investing.