What Is Fundamental analysis?
Fundamental analysis is a method used in finance and investing to evaluate the intrinsic value of a security or asset by examining its underlying economic and financial characteristics and performance. The goal of fundamental analysis is to assess the economic viability and financial health of a company, and to determine if the current market price of its securities reflects its true worth.
In fundamental analysis, investors analyse a wide range of financial and economic data, including financial statements, industry trends, and macroeconomic indicators, to gain insight into a company’s earnings potential, growth prospects, and risk factors. Key metrics analysed include revenue, earnings, profitability, and cash flow, as well as debt levels, management quality, and competitive position.