This document discusses fundamental analysis, which uses financial and economic analysis to predict stock price movements. It examines both macroeconomic factors like the economy and industry-specific factors, as well as individual company performance. Fundamental analysis seeks to determine a stock's intrinsic value based on its current and future earnings capacity. By identifying stocks trading below their intrinsic value, investors can purchase underpriced stocks. The document outlines top-down and bottom-up approaches to analysis, and describes the steps of fundamental analysis as evaluating the economy, industry, and individual companies.

1. FUNDAMENTAL
ANALYSIS

2. •Fundamental analysis is share valuation
technique which use the financial and
economic analysis to predict the movement of
share price.
•Such analysis mainly take into account the
macro economics factors such as economical
and industrial factors and individual
performance of the company.
•The information analysed can include the
financial reports of the company and non –
financial information such as change in

3. •Every share has an economic worth based on its
present and future Earning capacity .This is known
as intrinsic Value.
•The investment decision are made based on this
intrinsic value.
•By conducting fundemental analysis we can
identify this intrinsic value of stocki
•If the market price is less than intrinsic value than
the investors will buy stock that are trading
significantly below their estimated intrinsic value.
•If the market price is more than intrinsic value
investors prefer to sell the stock
•

4. APPROCHES OF FUNDAMENTAL
ANALYSIS
•Top –down approach
•The investors first analysis and forecast the
economical factors which is followed by industry
and companies
Bottom –up approach
The investors start with analysis and forecast of the
company and than the macro economics factors

5. STEPS IN FUNDAMENTAL ANALYSIS

6. ECONOMIC ANALYSIS
First step in fundamental analysis is evaluation of general
economy.
The important economic factors to be considered while economic
analysis are:
*agriculture growth
*Type of economy
*Business cycle
*GDP
*Interest rate
* Political stability

7. INDUSTRY ANALYSIS
An industry is a homogeneous group of
companies.by analysing various forms of industries
investors can identify thebest suited to benefit from
the current or future economic environment
The important factors that influence the
performance of industry group are:
Product line ,availability of raw materials and
other output, industrial life cycle , efficiency of
management ,skill full labour government policy.

8. COMPANY ANALYSIS
• Once the industry group is chosen investor has to
narrow the list of companies before proceeding to a
more detailed analysis.
• Comparative analysis of the companies in a particular
industry will help to select the best company out of it.
• An investor should analyse the resources and capabilities
within each company to identify those company that are
capable for creating and maintaining a competitive
advantage
• The analysis should focus on selecting company with a
sensible business plan solid management and the sound

9. THANK YOU