Fundamental Analysis

Question 1

Define Fundamental Analysis

Answer 1

Fundamental Analysis is the Skill of Reading Through all the Information Companies Provide About Themsleves to Make Intelligent Decisions.

Question 2

Explain the Goal of Fundamental Analysis

Answer 2

The goal of Fundamental analysis is to read Financial Statements and Other Sources of Fundamental Data to Glean Insight from a Company.

Question 3

Explain how Fundamental Analysis is

Based on Fact, not Opinion

Answer 3

• Even if a Company is selling, the only way to recognize profit is through Fundamental analysis.

Question 4

Explain how Fundamental Analysis is Good at Pinpointi Shifts in the Bussiness’s Health

Answer 4

• If a Company is Beginning to Grow or Fade a Fundamental Analyst Will be Early in Spotting it

Question 5

Explain how Fundamental Analysis is All about Execution

Answer 5

Think of it like a report card, Company CEO’s are great on getting Investors focused on the future, but the numbers don’t lie.

• Just like how a student can tell you how good they will do in school, the report card is the evidence of how things are actually going.

Question 6

Explain why Fundamental Analysis is better in the Long Term

Answer 6

Stocks Rise and Fall each Minute of the Day due to Random Flow of News

• When you focus on Fundamental Analysis, you’re investing in the actual bussiness and not the stock.

Question 7

What Fundamentals should you look for

Answer 7

1. Financial Performance
   - You need to recognize how much of a revenue a company is receiving
2. Financial Resources
   - You need to recognize a company’s assests (item of value owned by a company) and liabilities (Obligations the Company has made to outside parties who have provided resources)
   - Companies must have the Financial Power to continue going and growing
3. Valuation
   - If you overpay for the best company in the world, it is still likely you will lose money.
4. Management Team
   - You’re entrusting yout money to the CEO and other managment so you must be able to seperate the good CEO’s from the bad ones.
5. Macro Trends
   - A company must be able to keep up with competetors