Steps to check the status of companies in fundamental analysis
Fundamental analysis reports are based on real and accurate information from the past and the current situation. The stock buyer, based on real events and statistics and using his knowledge and experience, extracts a specific strategy and predicts the market.
Stock Fundamental Analysis Steps
- Investigating the state of the country’s general economy
The country’s economic situation can affect the stock market, so it is necessary to first examine the state of the country’s general economy in fundamental analysis. In examining the general economic situation of the country, such issues as whether the general conditions of the country are suitable for investing in the stock market, interest rates are rising or falling, does inflation have an effect, is the country’s trade balance favorable, and is the money supply expanding or contracting?
Analysts are examining how the country’s economic situation affects the company’s economic situation.
- Review the industry of the relevant company
In the next step in analyzing companies in fundamental analysis, you need to look at the state of the corporate industry in which you want to buy stocks. The bottom line is that if you want to buy shares in a company, you have to be in a good industry, because otherwise you can’t count on the company’s stock. Because even if you buy the best stocks of this company, you can’t get a good return. There is a well-known saying in the stock market that weak stocks in a strong industry are better than strong stocks in a weak industry.
- Company analysis
After you’ve looked at the state of the country’s economy, as well as the industry of the company you want to buy stocks, it’s time to look at the company you want to invest in. At this stage of the analysis of companies that is done in fundamental analysis. Examine the company’s financial statements so that you can make a profit.
Dividends patterns: Using the dividend pattern, you can find out the current value of the corporate dividend you want to buy.
Asset Patterns: As the name implies, this pattern examines the value of a company’s assets.
Revenue patterns: Finally, it’s time to look at the revenue patterns that you can use to assess the company’s current revenue value using revenue patterns.
- Determining the status of a company’s stock
Finally, it’s time to evaluate the stocks of the company you want to buy. You need to check whether the price for the company’s shares is correct or not. There are many ways to evaluate a company’s stock value, and you can use a variety of patterns to do so. In the following section, we look at this pattern:
Factors influencing fundamental analysis
After examining the company’s position in fundamental analysis, it’s time to look at the factors that can influence fundamental analysis which generally include the flowing:
The economic trend of the company in fundamental analysis
- Annual stock growth and the amount of growth that stock has had over the past three months.
- The amount of income earned per share.
- The ratio of dividends to capital
- The value-to-income ratio is the same as the P to E ratio.
- The amount of liquidity that the amount of liquidity is actually the sum of money and quasi-money.
- Debt rate and debt to asset ratio
- The amount of capital
- The value of the company’s performance
Basics of fundamental analysis
Another thing to note about fundamental analysis is what the basics of this analysis are. In order to answer this question, we must say that the basis of fundamental analysis is the annual audited report of companies which includes items such as balance sheets, company management items, profit and loss, company competitors, the attitude about the future of the company is the amount of growth that the company can have and ultimately examine the goals and business strategies of the company.