Fundamental Analysis

Fundamental analysis is the method of determining a securities intrinsic value by studying the affect of both macroeconomic and micro economic factors on the securities value such as economic environment, interest rates, company's management, revenues, earnings, return on equity, debt and so on.


Where to start:

Check the firm's EPS Ratio or earnings per share, that shows how much the company earns per share. EPS = (net income - dividend on preferred shares) / number of outstanding shares.

P/E Ratio - Price per earnings. Compares current share price over EPS.

PEG Ratio - Project earning growth which is projection of firm's one yer earning growth rate of the stock.

P/B Ratio - price to book. Compares market stock price with book price.

Dividend payout ratio. Dividend paid out to shareholders divided by net income.

Dividend Yield. Annual dividend per share divided by share price. It is expressed in percentage.

Return on Equity. Company's net income / shareholders equity


All the company's data is publicly available either at SEC or company's website.

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