#Fundamental-Analysis

Introduction to FA

• Fundamental analysis is a method of determining a stock’s real or fair market value.

Fundamantal Analysis types

• FA is mainly of two types
  • Qualitative –> Non-numeric aspects
  • Quantitative –> Number-crunching

Balance Sheet(BS)

• A statement of your position
• A statement that records Assets and Liability is called Balance sheet
• From business start till present.
  • Balance Sheet as on 31st March 2020
  • i.e statement from start till March 2020

Profit and loss (P&L)

• Financial performance calculated for one year
• 1st April - 31st March is mostly taken as Finalcial year
• P&L for year ended 31st March 2020
  • P&L for FY 2019-2020

Financial Ratio

General terms used

• Total Equity = Shareholders Equity
  • Equity Share Capital + Prefered Equity + Reserve
  • –> Book Value(BV)
• Capital = Total Equity + Debt
• Book value per share
  • –> Price to Book Ratio(P/B)
• Net Sales = Topline = Total Revenue
  • Total anount of sales made

Cash Flow(CF) statement

• It reveals how much cash the company is actually generating
• If sales is of RS 100, then
  • if is Rs 100 received –> CF is +ve
  • if some amount (Say 30) went as Credit(Udhari)
    • then CF is cal on 70
    • But P&L is cal on 100