Fundamental Analysis – Economic, Industrial & Company Factors

An investor conducts fundamental analysis and technical analysis to predict the future price movements of securities by analyzing the Economic factors, Industrial factors and Company specific factors. 

Various economic, industrial and company specific factors can have a direct bearing on prices of securities. A fundamental analysis helps an investor to understand the general behaviour of the market, industry or a company and prepare a buying and selling strategy. 

Also Read: Technical Analysis – Dow Theory

Various factors studied under Fundamental Analysis

Fundamental Analysis factors

Financial Leverage and Borrowing CapacityTax StructureTax frameworkPrevious track recordBalance of Payment SituationImport and export policies

Profits of the companyInfrastructural FacilitiesFinancing normsFinancial Stability & PerformanceDemographic FactorsState of technologyFuture estimates of sales, profitsClimatic ConditionsIndustrial PoliciesManagementState of EconomySocio-Demographic TrendsOperating EfficiencyOverall rate of growthSupply Sector Growth in Primary, Secondary and tertiary SectorsType of Industry – Growth, cyclical, defensive, cyclical growth Linkage with World EconomyIndustry Life cycle Economic ForecastsSWOT Analysis

Also Read: Technical Analysis – Dow Theory

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