Introduction To Fundamental Analysis
  1. Fundamental Analysis: Introduction
  2. Fundamental Analysis: What Is It?
  3. Fundamental Analysis: Qualitative Factors - The Company
  4. Fundamental Analysis: Qualitative Factors - The Industry
  5. Fundamental Analysis: Introduction to Financial Statements
  6. Fundamental Analysis: Other Important Sections Found in Financial Filings
  7. Fundamental Analysis: The Income Statement
  8. Fundamental Analysis: The Balance Sheet
  9. Fundamental Analysis: The Cash Flow Statement
  10. Fundamental Analysis: A Brief Introduction To Valuation
  11. Fundamental Analysis: Conclusion

Fundamental Analysis: Introduction


By Ben McClure

So, you want be a stock analyst? Perhaps not, but since you're reading this we'll assume that you at least want to understand stocks. Whether it's your burning desire to be a hotshot analyst on Wall Street or you just like to be hands-on with your own portfolio, you've come to the right spot.

Fundamental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis.Because the subject is so broad, however, it's tough to know where to start. There are an endless number of investment strategies that are very different from each other, yet almost all use the fundamentals.

The goal of this tutorial is to provide a foundation for understanding fundamental analysis. It's geared primarily at new investors who don't know a balance sheet from an income statement.While you may not be a "stock-picker extraordinaire" by the end of this tutorial, you will have a much more solid grasp of the language and concepts behind security analysis and be able to use this to further your knowledge in other areas without feeling totally lost.

The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company's future performance. A good part of this tutorial will be spent learning about the balance sheet, income statement, cash flow statement and how they all fit together.

But there is more than just number crunching when it comes to analyzing a company. This is where qualitative analysis comes in - the breakdown of all the intangible, difficult-to-measure aspects of a company. Finally, we'll wrap up the tutorial with an intro on valuation and point you in the direction of additional tutorials you might be interested in.

(Also, although it's not required, you might find it helpful to read our Investing 101 tutorial, as well as our tutorial on Stock Basics, before starting.)

Ready? Let's dive into things with our first section, What Is It?

Fundamental Analysis: What Is It?

  1. Fundamental Analysis: Introduction
  2. Fundamental Analysis: What Is It?
  3. Fundamental Analysis: Qualitative Factors - The Company
  4. Fundamental Analysis: Qualitative Factors - The Industry
  5. Fundamental Analysis: Introduction to Financial Statements
  6. Fundamental Analysis: Other Important Sections Found in Financial Filings
  7. Fundamental Analysis: The Income Statement
  8. Fundamental Analysis: The Balance Sheet
  9. Fundamental Analysis: The Cash Flow Statement
  10. Fundamental Analysis: A Brief Introduction To Valuation
  11. Fundamental Analysis: Conclusion
RELATED TERMS
  1. Financial Statement Analysis

    The process of reviewing and evaluating a company's financial ...
  2. Comparative Statement

    A statement which compares financial data from different periods ...
  3. Common Size Income Statement

    An income statement in which each account is expressed as a percentage ...
  4. Qualitative Analysis

    Securities analysis that uses subjective judgment based on nonquantifiable ...
  5. Common Size Financial Statement

    A company financial statement that displays all items as percentages ...
  6. Footnotes To The Financial Statements

    Additional information provided in a company's financial statements. ...
RELATED FAQS
  1. How legitimate are companies that advertise debt consolidation for all my credit ...

    Learn about how fundamental analysis ratios can be combined with quantitative stock screening methods and how technical indicators ... Read Answer >>
  2. How does fundamental analysis differ from technical analysis?

    Learn about the differences between technical analysis and fundamental analysis, such as how these investment strategies ... Read Answer >>
  3. How are the three major financial statements related to each other?

    Learn why investors analyze a company's financial statements, and how the income statement, balance sheet and cash flow statement ... Read Answer >>
  4. What items on the income statement are considered in fundamental analysis?

    Find out which items in the income statement are considered in fundamental analysis. How do investors use revenue, profit ... Read Answer >>
  5. What types of information does one need to perform a thorough financial analysis?

    Understand what types of information an analyst needs to examine for a thorough financial analysis, and learn how to use ... Read Answer >>
  6. What's the difference between an income statement and a balance sheet approach?

    Understand more about the principle purposes and primary differences between a company's income statement and its balance ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center