Fundamentals

AAA

DEFINITION of 'Fundamentals'

The qualitative and quantitative information that contributes to the economic well-being and the subsequent financial valuation of a company, security or currency. Analysts and investors analyze these fundamentals to develop an estimate as to whether the underlying asset is considered a worthwhile investment.

For businesses, information such as revenue, earnings, assets, liabilities and growth are considered some of the fundamentals.

INVESTOPEDIA EXPLAINS 'Fundamentals'

By looking at the economics of a business, the balance sheet, the income statement, management and cash flow, investors are looking at a company's fundamentals, which help determine a company's health as well as its growth prospects. A company with little debt and a lot of cash is considered to have strong fundamentals.

While fundamentals are most often considered factors that relate to businesses, securities and currencies also have fundamentals. For example, interest rates, GDP growth, trade balance surplus/deficits and inflation levels are some macroeconomic factors that are considered to be fundamentals of a currency's value

VIDEO

RELATED TERMS
  1. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  2. Annual Report

    1. An annual publication that public corporations must provide ...
  3. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  5. Income Statement

    A financial statement that measures a company's financial performance ...
  6. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
Related Articles
  1. Small Caps Boast Big Advantages
    Trading Strategies

    Small Caps Boast Big Advantages

  2. What Are A Stock's
    Investing Basics

    What Are A Stock's "Fundamentals"?

  3. 7 Steps To A Successful Investment Journey
    Entrepreneurship

    7 Steps To A Successful Investment Journey

  4. Profit From Market Misunderstandings
    Investing

    Profit From Market Misunderstandings

comments powered by Disqus
Hot Definitions
  1. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  6. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
Trading Center