Fundamental VS. Technical Analysis in Brief 

Fundamental and Technical analysis of stock market-2023


Fundamental and technical analysis are two most important factors for investing money in Stock Market. if i talk about these terms then both are at opposite for investing purpose. But both can be helped to choose best stock selections.


Fundamental Analysis 

Fundamental Analysis 


Fundamental analysis reports the company to judge its financial growth. It shows the key ratio of a company if it's stock price is overvalued or undervalued. It helpa to determine a company's worth. For an investor Fundamental analysis is key to manage their wealth management.


Technical analysis 

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How to check Fundamental of a company?


we should used some tools to find best company where you can invest money. these are important tools-

  1. EPS (Earning Per Share)
  2. P/E (Price To Earning Ratio) 
  3. P/B (Price To Book)
  4. Beta
  5. ROE (Return On Equity)
  6. DPR (Dividend Payout Ratio)
  7. P/S (Price To Sales Ratio)
  8. Dividend Yield Ratio.



What is EPS?

 Earning per Share is a financial measure of a company which reports the profitability of a company. It is calculated by dividing the company'snet income with its totle number of outstanding shares. 



EPS= Net Income of the company after Tax/Total Outstanding Shares


EPS is a symbol of the health of the company, a higher EPS means higher return for the investor.



What is P/E Ratio?


Price to Earning ratio is  a relation between a company's share price and earning per share. Simply it helps investors measure the market value of a share compared to the company's earnings. 


P/E= Market Price per share/ Earning per Share


  It denotes what the market is willing to pay for a company's profit. 


What is P/B?


Price-Book value is the market price per share divided by the book value per share


P/B = Market Price Per Share/ Book Value Per Share 


Where,

Market Price per share = Stock Price

Book value per share = Firm's assets - Liabilities


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What is Beta?

 Beta is a numeric value that measures the volatility (fluctuations ) of a stock to change in the overall stock market. 

It helps to investor to decide whether wants to go for riskier stock that is highly correlated with the market (beta above1) or with a less volatile one (beta below 1)



What is ROE?


Return on Equity is the measure of a company's net income divided by its shareholders'equity.


ROE = Net Income / Average Shareholder's Equity


ROE is considered a gauge of a corporation's profitability and how efficient it is in generating profits.



What is Devidend Payout Ratio?


Some companies pay out all their earning to shareholder's while some only pay a portion of their earnings. 


Dividend Payout Ratio = Dividends Paid / Net Income


What is Price To Sales Ratio?


P/S or PSR is a valuation for stocks , is calculated by dividing the company's market capitalisation by the revenue in last 12 months. 



What is Dividend Yield  Ratio?


The dividend yield ratio is the ratio between the current dividend of the company and the company's current share price.


Dividend Yield = Annual dividend per share / Price per share


This represents the productivity of your investments and considered as a sign of a stable company since only profit-making companies pay dividends.


Conclusion: Thus we have discussed the most important factor of fundamental analysis of stock market. If you get any informative learning from this post then send feedback and have you any question then comment in it.