What are some of the questions fundamental analysis attempts to answer? Briefly describe how fundamental analysis tries to answer each question.

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What are some of the questions fundamental analysis attempts to answer?

Briefly describe how fundamental analysis tries to answer each question.

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Answer;

First of all let us define what is mean by fundamental analysis.It is a technique that apply to determine value of  security by using on underlying factors that will affect a organization’s actual business and also affect its future prospects.
fundamental analyst examine the particular situation and he try that how it can be broken down into

(1) Quantitative Factor

(2) Qualitative Factor

Fundamental analysis find answer of following questions, like:

  • Are the company’s revenues growing or not?
  • Is company making actually a profit ?
  • Is Company in a strong  position to beat the competitors of market  in the future?
  • Is Company able to repay its own Debt ?
  • Is management of the company trying to Cook the books?

 

 

Many fundamental factors might  be grouped into two above mention categories:

1)quantitative

2)qualitative.

The financial meaning of two terms aren’t all  different from its regular definitions.

  • Quantitative factors – expressed in numerical terms  or expressed in numerical terms Qualitative – related  the quality or character of something.

 

By performing qualitative or quantitative analysis, you get the answer of many of your question

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