Learn fundamental analysis

Learn fundamental analysis of Stock.

Fundamental analysis is a method of valuing a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Video. Company earnings. Understanding a company’s earnings may help you evaluate a company’s intrinsic value.Free fundamental analysis course available here.

Today in 21 st Century still people Scare from Stock Market they consider it as a
Gambling, but it’s not Gambling as there is a logic behind the Price Movement in Stock
Market. 

Trading in Stock market is one of the easiest way to make money online and also the
worst way to lose your hard earned money. Mr Rakesh Jhunjhunwala , Mr Warren
buffet and many other made their entire wealth from the Stock Market its just because
of their knowledge of logic behind the Price movement in stock market and they have
Succeeded with phenomenal trades.

Investment in stock market gives the complete freedom in the financial world.

There are two Important things in Trading FUNDAMENTAL & TECHNICAL and if you
know it then the Chances of your losing money will be very less.

Fundamental Analysis

Fundamental Analysis observes numerous elements that affect stock price.
It is an method of evaluating a security in an attempt to measure it's intrinsic value, by
examining related economic , financial and other qualitative and quantitative factors.

There are a lot of parameter to check the Fundamental but here will discuss only 4
parameter which can be used to make profit in Short term.

1)Return on equity

(ROE) is the amount of net income returned as a percentage of shareholders’ equity
Return on Equity, also known as also known as Return on Net Worth it signifies how
good the company is in generating returns on the investment it received from its
shareholders.
Return on Equity = Net Income/Shareholder's Equity

Chose only that stock which has ROE of Above 10 of last 2 years . ROE above 15 is
considered a Good Stock & above 25 is Best Stock.
Now a days it is very easy to check the ROE & all other things also on several websites
like moneycontrol.com ,economicindia.com

2)Debt to Equity Ratio

The Debt-to-Equity ratio (D/E) indicates the proportion of the company’s assets that
are being financed through debt. Debt to Equity ratio is a long term solvency ratio that
indicates the soundness of long-term financial policies of the company
Don’t Buy any stock if Debt to Equity Ratio is More than 1 of last 2 Years, it should
be below 1.

                                

3)Shares Pledged by Promoters

A promoter is an Person who helps to raise money for investment purpose.
promoters are the majority shareholder group that manages the day-to-day affairs of a
company. When they need money, very often, promoters of listed companies pledge all
or some of their shares with lenders. It means that these shares are offered as collateral
to banks in exchange for loans.
Don’t Buy any stock if Shares Pledged by Promoter is More than 30%

4)Dividend Yield

The dividend yield is a financial ratio that measures the amount of cash dividends distributed to common shareholders relative to the market value per share. The dividend yield is used by investors to show how their investment in stock is generating either cash flows in the form of dividends or increases in asset value by stock appreciation.

We should buy only those Stock which is Consistently Giving Dividend to its Shareholder.