Security Analysis

FUNDAMENTAL ANALYSIS Fundamental analysis is examination of the underlying forces that fix the well being of examination of the economy, industry groups, and companies. As with close analysis, the goal is to derive a forecast and profit from in store(predicate) price movements. INTERPRETATION Most fundamental information focuses on economic, industry, and follow statistics. The typical approach to analyzing a follow involves three sanctioned steps: 1. Determine the hold back of the general economy. 2. Determine the condition of the industry. 3. Determine the condition of the company. ECONOMIC ANALYSIS The economy is studied to pay off if overall conditions are good for the pains market. Is inflation a concern? Are interest rates likely to airlift or fall? Are consumers spending? Is the trade eternal rest favorable? Is the money supply expanding or contracting? These are just some of the questions that the fundamental analyst would ask to image if economic conditions are right for the stock market. INDUSTRY ANALYSIS It is the engage of industries which are on the upswing. The ideal investment is the investment in the growing industries. It is often said that a weak stock in a strong industry is preferable to a strong stock in a weak industry.

In order to make productive investments the investor should know the industry variety used in the economy. It is also enviable to know the characteristics, problems and practices in different industries. COMAPNY ANALYSIS After determining the economic and industry conditions, the company itself is analyzed to determine its financial health. This is usually done by studying the companys financial statements. From these statements a number of useful ratios can be calculated. The ratios fall under five important categories: profitability, price, liquidity, leverage, and efficiency. While performing ratio analysis of a company, the ratios should be compared to other companies within the same or... If you want to get a full essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.