A to Z guide on analyzing stock fundamentals
If you are looking to invest in the stock market, you surely have tried your hand at determining stock prices and trends. Various factors, both microeconomic and macroeconomic, can affect the value of a security. However, the fundamental analysis uses some quantitative and qualitative metrics to do this with some accuracy. Let us understand what these metrics, called stock fundamentals, are and how to analyse them. What are stock fundamentals? Stock fundamentals are the key metrics that are used to analyze the performance of a company. These include cash flow, balance of debt and equity, return on assets (ROA), accounting ratios, and other quantitative data. Not just this, but qualitative measures– such as the business environment and the company model– are also considered. The way capital is managed is taken into account. Overall efficient management is a prerequisite to the maximization of shareholders’ wealth.