Fundamental analysis
Fundamental analysis is a method used to determine the value of a stock by analyzing the financial data that is 'fundamental' to the company. That means that fundamental analysis takes into consideration only those variables that are directly related to the company itself, such as its earnings, its dividends, and its sales. Fundamental analysis does not look at the overall state of the market nor does it include behavioral variables in its methodology. It focuses exclusively on the company's business in order to determine whether or not the stock should be bought or sold.
This means that you take the balance sheet, take only those heads which are directly related to main business, hence ignore other income and one time sales. Go through the schedules and calculate operating EBITDA. Once that is available, you can use DCF to calculate the share value of your target company.
In case of any issue with DCF or EBITDA, let me know.
Fundamental analysis
Fundamental analysis is a method used to determine the value of a stock by analyzing the financial data that is 'fundamental' to the company. That means that fundamental analysis takes into consideration only those variables that are directly related to the company itself, such as its earnings, its dividends, and its sales. Fundamental analysis does not look at the overall state of the market nor does it include behavioral variables in its methodology. It focuses exclusively on the company's business in order to determine whether or not the stock should be bought or sold.
This means that you take the balance sheet, take only those heads which are directly related to main business, hence ignore other income and one time sales. Go through the schedules and calculate operating EBITDA. Once that is available, you can use DCF to calculate the share value of your target company.
In case of any issue with DCF or EBITDA, let me know.
Cheers
Hello, I m Avinash, Please tell me how to use DCF i.e. The discount rate and the future value,
Best regards, Avinash
Hi,
i have a project : fundamental analysis of the IT industry
for the representation of the industry i have taken the biggies:
Infosys, tcs, wipro, satyam and HCL
if you could help me with project by providing a framework or any example of the analysis done on some other company it would be just great!
thanks so much!
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