Fundamental analysis

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Bruxelles Bourse.jpg

Public market

Exchange
Securities

Fixed income
Corporate bond
Government bond
Municipal bond
Bond valuation
High-yield debt

Stock
Preferred stock
Common stock
Registered share
Voting share
Stock exchange

Securitization
Hybrid security
Credit derivative
Futures exchange

Spot market
Forwards
Swaps
Options

Exchange rate
Currency

Money market
Reinsurance market
Commodity market
Real estate market

Participants
Clearing house
Financial regulation

Finance series
Banks and banking
Corporate finance
Personal finance
Public finance

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.[1] The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.

Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

  • to conduct a company stock valuation and predict its probable price evolution,
  • to make a projection on its business performance,
  • to evaluate its management and make internal business decisions,
  • to calculate its credit risk.

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