How is Economy, Industry and Company analysis is carried
out by the fundamental investore?
Answer Posted / khalid
For example: lets take an Oil Company
First you analyze the world economy for oil, look at the
events that took place globally, e.g. The Middle East. Look
at the events that might affect this oil company which you
select in the first place.
Second, you analyze the industry of Oil in the country that
the company operate. Look at the competitors and how this
company and other similers interact with each other and
compete in the market.
Third, you analyze the company itself. By looking at the
financial ratios (liquidy, leverage, turnover rations) for
the past 2 or 3 years which will present for you a trend
analysis of its performance and then compare it with the
market, then you can determine whether it would e a good
investment or not! or Does it worth to buy this company's
securities!
| Is This Answer Correct ? | 8 Yes | 3 No |
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