Fundamental Analysis li Introduction - Security Analysis and Investment Management

In the previous lesson we have discussed about Economic Analysis and Industry Analysis and now in this lesson light is thrown on company analysis. In the company analysis the investment analyst collect all the information related to the company and evaluates the present and future value of the stock. In this analysis, all the factors affecting the earnings of a particular company are considered.

For company analysis, the internal and external information need to be studied. Internal information consists of data and events made public by firms concerning their operations. The principle information sources generated internally by a firm are its financial statements. External sources of information are those generated independently outside the company. They provide supplement to internal sources.

A good analyst must train himself to understand the kind of flexibility permitted in accounting and the effect of this flexibility on his interpretation of what he sees. For company analysis, the factors that need to be considered and the methods of analyzing financial statement of the company are highlighted in following lines.


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Security Analysis and Investment Management Topics