Fundamental analysis is a method used to evaluate the intrinsic value of a security, such as a stock or a bond, by analyzing various economic, financial, and qualitative factors that influence the company’s performance. This analysis involves examining financial statements, economic indicators, management practices, and industry trends to determine the potential of a company’s future earnings and growth prospects.
In stock market trading courses and training institutes, fundamental analysis is often taught as a basic course on stock market investing. Students are taught to understand financial statements such as balance sheets, income statements, and cash flow statements, and how to analyze these statements to evaluate a company’s financial health. They also learn how to interpret economic indicators such as GDP, inflation rates, and interest rates, and how these indicators can affect a company’s performance.