Stocks 2021 | How To Do Basic Fundamental Analysis Of A Stock |

 When looking for a stock to invest in you need atleast the basis foundation knowledge of investing. To make sure you know what you are getting the initial amount with good profit. 

That's why you need to know How To Do Basic Fundamental Analysis. 

These measures will help you tell the performance of a company and its management, and always remember it is investing, not gambling.

Management.


If you want to check how the company is performing, check how it's management is working. 

The performance of a company is measured by its management, how the management is making end to end operation, creating opportunities for growth, making a decent services, or products for its customers or clients. 
These activities determines the survival of a company and better expansion of different levels. 

To ensure how the management is handling the daily operations you need to check 4 basic things.


Planning :- how the management plans it's every next move and how they plan to overcome any misconduct is everything, shows how determine they are to make things happen in their favour.

Smart planning is always deciding every possible move and this should be the first thing to look in a company or stock. 
Long term investment is the complete package of thorough study and research, that's why you need to study the details of a stock before investing in it.


Organizing:- when you learns what they planned to do, now you need to know how they do it.

Every plan needs a perfect execution, if the execution is not up to the mark all the previous steps are ruined. That is why when you pick a company to invest in, look for their previous work how they organized a task and how they executed it.

Management's previous track records show if they are efficient or not and this plays a crucial role for their growth perception. 


Control:- controlling is the key step in management, if they can't control the staff, operation, and performance, then they can't control it's outcome. Every organization needs to be disciplined.

Now when organization have options of centralising and decentralising discipline is still in both the options for a good efficiency work.

Check if the company you are picking is able to control or dominate in its surrounding. This shows how much capable they are winning the situation.

Effectiveness:- effectiveness is as important as the above points. If the management is not effective their subordinates will be the same too.

You need to be effective to be best in your field and this important criteria must not be unseen.


Business Model 


For more and more profit maximization and longer survivability business model is always considered before every step and same goes for investing too.
To get better return on your investment first you need to understand the business model.

Usually this measure is ignored while looking at the financial statements, but it is as important as the income statement.  

To be in the competition you need to be able to compete, but to be the best in the competition you need to be the best one out there, and having a strong business model depending on the costumers and clients you are targeting, creating values or solving a great problem. These few things helps you to stand separate from the rest. 

Analysing the business helps you understand the field they are working in and that shows how great that will work and it automatically create a chance for a win- win situation if the competition is few or very low.
That is why many investors take a good look at the business model and how fast it adapt to changes.

Competition advantage


Competition advantage is a very must and worth your time to check when investing in a stock. When you buy anything valuable you wish that no other guy should have it too otherwise it want be valuable or unique. And competitive advantages are the same the one who possess it have h upper hand in business.
 
Very business try to find and opportunity to have an advantage over other.

When buying a stock check the background of the stock and what advantages it have over other stocks and that will help you make a benefiting investment.

Competitive advantage will maintain a steady growth rate of stock price and eventually boom with a perfect changes or achievement of the company.


Financial statements

Financial statements are the mirror image of the company if the company is performing well it will how more of profit and revenue.
Checking financial statements consists of income statement, balance sheet and cash flow.
Checking these will give you the idea of how the company is performing and how many customers are regularly increasing. 

Investing in a company which in soo much debt is not considered as its poor performance make is a unfavorable business model in its field. 


Demand In The Market.



Demand is one factor that makes the company alive for its services or products. The more demanding it's services or products the more survivability will be.

Many well stablish company are always creating their demands, they create a strong base that nobody could easily fit in their shoes. Business Model depends on this key point, they need to have atleast one thing that makes them specialist in their respective fields.

For example:- Reliance is in demand for its Jio, Facebook is in demand for its excellence for connectivity, or Tata Motors for its affordable cars. 
These things make their demands in the market. 

Investing in such stock that solve social problems or that have a huge demand is very profitable.

As Pfizer announced its successful trial of COVID-19 vaccine trial, the demand and its share price rises drastically. 

These are the basic of Fundamental Analysis, you don't need any high level expertise to analyse a stock.

You eventually do fundamental analysis on your daily basis like when buying a car, or any other things.
 
Comment below what is the last thing you analysed before realising it.


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