What are the different types of Fundamental Analysis?

1. Qualitative Analysis 🧠

• Focuses on non-numerical factors that affect a company’s performance.
• Key Areas:
  • 👩‍💼 Management Quality: Leadership and decision-making strength.
  • 🌍 Industry Analysis: Market position and competition.
  • 📜 Brand Value: Reputation and customer trust.
  • 🏗️ Business Model: How the company earns revenue and grows.

2. Quantitative Analysis 💹

• Involves analyzing financial data and ratios from reports.
• Key Metrics:
  • 💰 Earnings Per Share (EPS): Profitability for shareholders.
  • 📈 Price-to-Earnings (P/E) Ratio: Stock price vs. earnings.
  • 🧾 Debt-to-Equity Ratio: Company’s financial health.
  • 💵 Cash Flow: Liquidity and operational efficiency.
  • 📊 Return on Equity (ROE): How well a company uses investors’ money.

3. Top-Down Approach 🌎➡️🏢

• Starts with macro-level analysis:
  • 🌍 Economy (e.g., GDP growth, interest rates).
  • 📂 Industry trends (e.g., demand-supply balance).
  • 🏢 Specific companies with strong potential.

4. Bottom-Up Approach 🏢➡️🌎

• Focuses on analyzing specific companies first:
  • 📋 Financial health.
  • 📜 Business strategy.
  • 🏆 Competitive advantage.
• Broader market conditions are secondary.

Conclusion
Fundamental analysis uses qualitative and quantitative methods, combined with top-down or bottom-up approaches, to evaluate a company’s potential. 🏆 Perfect for making informed decisions! 📉📊