Fundamental Analysis

Definition

The process of determining the value of a

company by analyzing and interpreting
such key factors as economy, industry, and
company
The Analysis Ring
Company Analysis

Industry Analysis

Economic Analysis
Areas of Analysis

Economic Analysis

Industry Analysis

Company Analysis
ECONOMIC ANALYSIS

Economic analysis may include a detailed

examination of each sector of the economy
KEY ECONOMIC FACTORS
1. Government fiscal policy:
Taxes
Government spending
Debt management

2. Monetary policy:
Money supply
Interest rate

3. Other factors:
Inflation
Consumer spending
Business investments
Foreign trade
 Developing an Economic Outlook

Once developed a general economic outlook,

use the information in one of two ways.
 One approach is to construct an economic
outlook and then consider where it leads in
terms of possible areas for further analysis.
 A second way to use information about the
economy is to consider specific industries or
companies and ask: How will they affected
by expected development in the economy
INDUSTRY ANALYSIS

Study of industry groupings, by looking at

the competitive position of a particular
industry in relation to others & by
identifying companies within an industry
that hold particular promise
INDUSTRY ANLYSIS

Normally, an investor can gain valuable

insight about an industry by seeking
answers to these questions:

1. What is the nature of the industry?

2. To what extent is the industry regulated?
3. What role does labor play in the industry?
INDUSTRY ANALYSIS

4. How important are technological

developments?
5. What are the important financial and
operating considerations?
6. Which economic forces are specially
important to the industry?
COMPANY ANALYSIS

Company analysis deals with the

estimation of return and risk of individual
shares.
Information regarding companies can be
broadly classifies into two broad groups.
Internal
external
FINANCIAL STATEMENTS

financial statements enables investors to

develop an opinion about the operating
result & financial condition of a firm. There
are three types of financial statement

Balance sheet
Income statement
Statement of cash flow
TOOLS OF FINANCIAL
STATEMENTS ANALYSIS

Comparative financial statement analysis

Common size financial statement analysis

Ratio analysis

Cash flow analysis

Valuation methods
GROUP MEMBERS

USMAN YOUSAF

AHMAD HASSAN

NAVEED HUSSAIN

MOHSIN AYAZ

MUHAMMAD HAYAT
PRESENTED BY

MOHSIN AYAZ

MUHAMMAD HAYAT

NAVEED HUSSAIN SHAH

THANK YOU