We cannot be a blind man in our stock trading (or stock investing) if want to do it in the right way and gain enough profit. Being blind man means that we do the stock trading just by using our feeling alone (or plus some rumors if available). Yeah, it mustn’t be done if do not want to do the meaningless stock trading – just to waste both or our money and time. Therefore, a stock trader/investor must know about Fundamental Analysis (FA) and (or) Technical Analysis (TA).
As have mentioned before, Fundamental Analysis (FA) is used to know the real value of the stocks. It can help us to know whether the current stocks price is overvalued, normal-valued, or undervalued. The stocks’ real value is calculated based on the economy, industry, and company financial condition. In short word, the Fundamental Analysis tells us the stock’s fair value. We can use this fair value to decide whether to buy, sell, or just stay away from the stocks.
Yeah, it is true that in Fundamental Analysis: Company Financial Condition part I article, we have discussed about what and how to analyze the Company Financial Condition. However, it is only in general way so you may still not understand how to analyze Company Financial Condition in practical way. Therefore this time, let’s be more detail about how to do Company Financial Condition analysis so you can practically do the Stocks Analysis and find the best value of the stocks to be bought.
As mentioned in the previous Fundamental Analysis (FA) article, Company Financial Condition calculation is a micro analysis which is done after do the macro analysis (wider Economy Condition and Industry Condition calculation). The Company Financial Condition calculation is about how we analyze the company’s financial healthy. As for your information, this part is very important in the whole Fundamental Analysis (FA) since Stocks Market is all about prospect and expectation.
Beside the Technical Analysis (TA), the Fundamental Analysis (FA) is one of the most popular terms in Stocks Trading/Investing. Fundamental Analysis is a stocks analysis method which utilizes the study of economy, industry, and company condition to determine the stocks’ fair value. Fundamental Analysis heavy utilizes the company’s financial report to calculate whether the stocks’ price has been in its real value, under value, or over value.