7.3 Fundamental analysis Flashcards
1
Q
What is fundamental analysis?
A
A systematic approach to evaluating company performance based on analysis of its financial statements.
2
Q
What types of factors does fundamental analysis consider?
A
Interest rates Production Earnings Employment GDP Housing Manufacturing Management
3
Q
What are the objectives of fundamental analysis?
A
To generate insights and forecasts about the company’s future performance, including:
- its value
- the performance of management
- the company’s intrinsic value and growth prospects
- the performance against industry and the wider economy
4
Q
What three types of analysis are included in fundamental analysis?
A
- economic analysis
- industry analysis
- company analysis
5
Q
What is analysed during economic analysis?
A
GDP Interest rates Employment Foreign exchange Manufacturing
6
Q
What is analysed during industry analysis?
A
Competitors
State of industry
Porters five forces for the industry
7
Q
What is analysed during company analysis?
A
The business’ assets, liabilities and earnings
