MQ Expresso

MQ Expresso - Fundamental Analysis (FA)

MQTrader Jesse
Publish date: Sun, 02 May 2021, 08:09 AM

MQ Expresso - Fundamental Analysis (FA)

Fundamental Analysis (FA) is a method of evaluating the company itself to find its intrinsic value. Normally the evaluation is based on the economic and financial factors of the company. Evaluation of the company will lead to finding the true value of the company eventually. One can know whether the company is overvalued or undervalued.
 
The first aspect to study is the financial statement of the company. A lot of the information can be obtained from the financial statement of the company. The main purpose of studying financial statements is to investigate the earning ability of the company. The 3 main financial statements to analyze are as follow:
  1. Balance Sheet
  2. Income Statement
  3. Cash flow statement
These statements will justify the financial health of the company and guarantee the earning ability of the company in the future.
 
Moreover, company prospects are another aspect to investigate in fundamental analysis. This aspect provides insight into the company’s business and assists investors in determining the earning ability of the company and opportunity of the company to last in the future. Financial statement shows the earning ability from the past records of company with numbers, but company prospect shows the earning ability based on the following external factors:
  1. Economic moats
  2. Quality of management
Economic moats of a company are the factors which make the company become more competitive, for instance, intangible assets and network effects. The long lasting of a company is affected by the quality of the management. Management plays a significant role in operating a company and making sure the company will continue to develop. 
 

Conclusion

 

Fundamental analysis is a method which focuses on the company from the aspect of financial and economic. This analysis is totally different from technical analysis which focuses on price movement and volume. For the application of Fundamental analysis through Quantitative Method, you can refer to MQ Trader – Fundamental Analysis [TOPGLOV].

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Disclaimer 

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.
 

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