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For a long-term investment in a stock, we must concentrate more on the company's fundamental research in order to get excellent future returns. When you think of investing in the stock market, you may have heard that you should choose the best stock for your investment from among the hundreds of companies listed here. A good stock here refers to a business that is fundamentally sound, and in order to do so, we must first learn the fundamentals of fundamental analysis.
The most important aspects of basic analysis -
In a business channel or newspaper, a stock review covers a variety of terms such as operational profit, corporate debt, EPS, P/E Ratio, book value, and so on. Please explain what these terms imply and how they are utilised in basic analysis.
1. Figure of sales (sale) -
The company's cell data must be considered during fundamental analysis. We need to know how much the company's market share has grown and how much profit it has generated as a result. The analysis of a company's sales (SAIL) data also aids in forecasting future success.
The marketing strategy of the business is shown in the cell figure. If a company's sales have been consistently rising over the past several years, it's reasonable to believe that this pattern will continue next year and that its marketing approach is improving.
The overall sales number is an essential method to determine the company's current growth and financial health from this perspective. Other key metrics, such as the company's operational profit and net profit, are calculated as a result of this.
2. Operational Advantages
In fundamental analysis, the company's operating profit or operating income provides a clear indicator of its operational and management efficiency. The selling data considers the cost and day-to-day running costs, such as workers, fares, energy, and transportation, among other things.
It's essential to remember that the profit or dividend paid to shareholders is contingent on the company's success. If you wish to invest in a business for a long time, this number should be carefully monitored since it indicates how efficiently the firm's goods are manufactured and sold.