Role of Fundamental Analysis in Stock Market.
                     ROLE OF FUNDAMENTAL 
ANALYSIS IN STOCK MARKET
What is Fundamental Analysis?
• The basic Fundamental Analysis meaning is a 
method that is used for measuring the 
intrinsic value of a stock or security. 
• It mainly depends on the economic factors 
affecting the business and its financials.
Source: top10stockbroker.com
Types of Fundamental Analysis
• There are two different Fundamental Analysis 
Types and they are quantitative and qualitative.
• Fundamental Analysis Stocks that involve brand 
value, the financial performance of the company, 
management’s decisions, and other similar 
factors can be termed as a qualitative approach.
Source: top10stockbroker.com
Factors affecting Fundamental 
Analysis
• Company’s revenue and its structure
• Growth of the revenue over the years
• Profit made by the company in the past years
• Debt structure of the company
• Rate of Turnover
• Employee management and management’s 
approach towards its employees
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How to start a Fundamental Analysis?
• There are few basic steps to start this analysis 
and the steps are –
– For preparing the Fundamental Analysis 
Strategies, you first need to understand the 
company well
– The second step is to use financial ratios. 
The ratios are the primary source of 
information required for this analysis.
Source: top10stockbroker.com
How to start a Fundamental Analysis cont.
• Third step is to study the financial and annual 
reports of the company.
• The fourth step is also about reading the annual 
reports but of the rival companies’.
• Next step is to compare the company’s debt 
structure with its peers and rivals
• Finally, you need to analyze the prospects of the 
company to find out its worth.
Source: top10stockbroker.com
The Role of Fundamental Analysis in 
Trading
• The role of Fundamental Analysis in Trading is 
highly important. 
• It is undoubtedly the best possible way to find 
out the real worth of any stock.
Source: top10stockbroker.com
GENERAL STEPS TO FUNDAMENTAL 
EVALUATION
Economic Analysis or Forecast
• This needs to be analyzed closely to begin 
fundamental research. 
• The growth in the economy directly affects the 
growth of companies and their stocks in general 
with some exceptions.
Source: top10stockbroker.com
Company Analysis as part of Fundamental 
Analysis
• For selecting a company out of the industry, the 
first step is to shortlist a few of them. You need 
to shortlist the companies on the basis of –
– Its prospects in terms of technology and 
innovation
– Its marketing standards
– Whether it has an edge over other 
companies or not?
– Market share
– Financials
– Brand value
Source: top10stockbroker.com
Industry or Sector Analysis
• You need to get down to a few or one specific 
industry which seems more promising than the 
others in your analysis. 
• It can be done by comparing the growth of 
certain industries that you prefer or as per your 
analysis.
Source: top10stockbroker.com