Скачать или смотреть 6 Steps to Fundamental Analysis

6 Steps to Fundamentally Analyze any company.
Step-1 Understand the Business
You have to check the products, promoters and competitors of the company. You can study the mission, vision and values of the company on their website.

Step-2 Check Financial Ratios like,
1. EPS (Earning per share)- Increasing EPS for last 3-5 years are a good sign
2. Price to earning (PE) Ratio- Lowest among the industry peers
3. Return on Equity- Average 3 years is less than 15% is preferred
4. Debt to Equity- Less than 0.5 is preferred
5. Current Ratio- Greater than 1 is preferred

Step-3 Check past financial results
You can easily check the past financial results of a company by analyzing its all three financial statements like Balance Sheet, Profit & Loss Statement and Cash Flow Statement.

The thumb rule is that if revenues or sales, net profit and margin are increasing for the last five years, then it is a good stock to consider for long-term investment purposes. You can also check the operating cost, expenses, assets and liabilities, net cash flow, etc.

Step-4 Competitors analysis
The next step is to make a comparison of a company with its peers in the industry.

Step-5 Check Debt of the company
Check the total debt of the company which means how much money a company owes to its creditors.
Higher the debt amount to be paid, lower will be chances of paying a dividend on equity.
The thumb rule is that if debt to equity ratio is less than 1, then that stock should be preferred.

Step-6 Future prospectus and strategies
You should always check the future prospects and strategies of a company because the returns you want to get are based on the future possibilities but not on the past events.

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