Theory of fundamental analysis
Economic analysis
Industry analysis
Company analysis
Fundamental analysis: Fundamental analysis is ways of scientific analysis as it try to estimate the intrinsic worth of the company. It analysis the basic fundamental criteria of the company like sales, profits, balance sheet studies. It involves assessing short and long term prospects of different industries and companies. It may also involve studying interest levels, capital market conditions and then out for national economy and also the economies of trading partner countries. One of the most important factors of affecting price of a corporate security is the actual/ expected profitability of the issuing company. Fundamental analysis pays
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It is the integral part of the economy of a country, more so in a free economy like USA and to some extent in a mixed economy like India. After the new liberalized economic policy implementation say after 1991 India is also emerging as a free economy. To get an insight in to the complexities of the stock market, one needs to develop a sound economic understanding and be able to interpret the impact of important economic indicator on stock market.
Important economic analysis indicators:- monsoon,wart,inflasion,foreign exchange reserves public debt and foreign debt, budgetary deficit, domestic savings and capital output ratio, infrastructure. Government policy, interest rate, taxation policy, balance of trade, employement,political situation and international developments are some of the important economic indicators. A favorable monsoon has appositive impact on stock markets.
Key economic indicators:-
There are some indicators to access the Indian economy. Main indicators:-
Rainfall, agricultural production, money supply, corporate profits, saving to investment ratio, credit position, stock market index, unemployment rate and
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On the other hand, instability causes insecurity, especially if there is the possibility of government being ousted and replaced by another that holds diametrically different political and economic beliefs.
Foreign exchange risk:
This is a real risk and one must be congnizant of the effect of a revaluation or devaluation of the currency either in the home country or in the country the company deals in devaluation in the home country would make the company’s product more attractive in other country. its would also make imports more expensive and if a company is dependent on import margins can get reduced. On the other hand devaluation in the country to which one export would make the company’s products more expensive and this can adversely impact sales.
Inflation:
Inflation has an enormous effect in the economy. Within the country it erodes purchasing power as a consequence, demand falls if the rate inflation in the country from which a company imports is high then the cost competitiveness of the product finally manufactured. Conversely, if the rate of inflation in the country to which one export if high, the products stability and domestic companies and industries prosper art such
growth is a sure sign of a slight one. Low inflation is also is also prevalent
There are different studies of the causes of delinquency and crime, a good theory is to provide an opening lens through interpreting and understanding when a manifestation of behavior is present. Theoretical integration generally involves borrowing theoretical constructs from competing theories and combining them into a single theory. It is a well-established sociological fact that individuals behave differently in the presence of certain people than in the absence of these same people. For instance, a man behaves differently when his wife is in the room than when she is absent; a worker behaves differently in the presence of the boss, and so forth. The reason is obvious; certain behaviors are reinforced or punished in the presence of a given
There are very many different economic indicators that are used to analyze economic activity of a company, industry, country, or region. There are three different general trends (directions for prices or rates) in the economy. "Those with predictive value are leading indicators; those occurring at the same time as the related economic activity are coincident indicators; and those that only become apparent after the activity are lagging indicators. Examples are unemployment, housing starts, Consumer Price Index, industrial production, bankruptcies, GDP, stock market prices, money supply changes, and housing starts also called business indicators." (http://www.investorwords.com/1643/economic_indicator.html)
The stock market is a vehicle to invest money. It is where consumers buy and sell fractions of companies, and is referred to as stocks. A proven method to achieve wealth while keeping up with inflation, comprised of publically held companies who offer goods and services that are used by the general public daily. Companies sell stocks to public investors in a free and open market environment on a daily basis, which is an effective strategy to build a sound financial future.
	 When I say that the government is to unstable, I mean that it is too susceptible to being taken over by an army. For example, in the 1930's, the Imperialist Japanese Army was using their influence over the Minister of War to take over Manchuria, and eventually the Japanese government, and they were using assassination as the chief method of wiping out any political opposition.
Other types of exchange rate risks are translation risk and so-called hidden risk. The translation risk relates to cases where large multinational companies have subsidiaries in other countries. On the financial statement of the whole group, the company may have to translate the assets and liabilities from foreign accounts into the group statement. The translation will involve foreign exchange exposure. The term hidden risk evolves around the fact that all companies are subject to exchange rate risks, even if they don’t do business with companies using other currencies. A company that is buying supplies from a local manufacturer might be affected of fluctuating foreign exchange rates if the local manufacturer is doing business with overseas companies. If a manufacturer goes out of business, or experience heavy losses, it will affect all the companies it does business with. The co...
These occur if the currency in the home market strengthens in comparison with the currencies in the target markets, which reduces the value of earnings from foreign business. For example, an export manager of one of the companies surveyed said, “We pay the salaries of our staff in Swiss francs. The customers pay in Euros. Because of the current strength of the Swiss franc, we take a big margin loss”. In addition, Inflation in foreign markets can have a similar effect if it leads to devaluation of the currencies concerned. Recessions in foreign markets and an increase in state indebtedness can cause demand for the company’s products to
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
Inflation and unemployment are two key elements when evaluating a whole economy and it is also easy to get those figures from National Bureau of Statistics when you want to evaluate it. However, the relationship between them is a controversial topic, which has been debated by economists for decades. From some famous economists such as Paul Samuelson, Milton Freidman etc to some infamous economists, this topic received a lot of attention. However, it is this debate that makes the thinking about it evolve. In this essay, the controversial topic will be discussed by viewing different economists’ opinions on that according to time sequencing. But before started, it is worthy getting a better understanding of the terms, inflation and unemployment.
Fundamental analysis is the assessment of the intrinsic value of a stock by examining related economic, financial and other qualitative and quantitative factors.
There are many factors that affect the economy, inflation is one of them. Basically inflation is risingin priceof general goods and services above a period.As we see value of money is not valuable for the next years due to inflation. Today every country has facing inflationary condition in their economy.GDP deflator is a basictool that tells the price level of final goods and services domestically produced in an economy.GDP is stand for gross domestic product final value of goods and services, Furthermore GDP deflator shows that how much a change in the base year's GDP relies upon changes in the price level. . Inflation in contrast, how speedy the average prices intensity is increases or changes above the period so the inflation rate define the annual percentage rate changes in the level of price is as measure by GDP deflator more over GDP deflator has a advantage on consumer price index because it isn’t only based on a fixed basket of goods and services. It’s a most effective inflation tool to identify the changes in consumer consumption and newly produced goods and service are reflected by this deflator. Consumer price index (CPI) is also measure the adjusting the economic data it can also be eliminate the effects of inflation, through dividing a nominal quantity by price index to state the real quantity in term.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.
What is the stock market? Businesses share part of the company by selling stock, or shares of ownership. When investors own shares of a company, that company is considered public because the general public has an ownership stake in that company. At the high ranks of the companies are the board of directors, whose job it is to make sure the business’s managers are working in the best interests of the multiple owners and shareholders. Companies sell shares so they can expand their businesses and make them better, such as by building manufacturing plants, buying other companies, and developing new and improved products to keep their business profitable. America’s railroads, steel manufacturers, car companies, and telephone companies all started with the help of money from opening up their business to the Stock Market. The Stock Market started in the 1920’s. People who were smart enough to buy them back then could build up a fortune since the market was growing so rapidly. One wh...
Inflation is one of the most important economic issues in the world. It can be defined as the price of goods and services rising over monthly or yearly. Inflation leads to a decline in the value of money, it means that we cannot buy something at a price that same as before. This situation will increase our cost of living.
Mainly advantages of location decide the structural growth of the industries in the economy. More number of states in the country faces the problem of advantage location. Similarly, the agriculture sector also suffers from natural calamities and other disturbances. The dependence on agriculture varies considerably across the states.