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Anonymous

05 Nov 2020

SeedlyAMA

What is fundamental analysis and how would you break it down for a beginner investor and in layman terms?

AMA ShareInvestor

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James Yeo

05 Nov 2020

Editor at SmallCapAsia.com

By definition, Fundamental analysis is the process of evaluating a stock for creating forecasts about its future price. In layman terms, FA is to analyze the numbers and determine if the company has sound fundamentals. It is not so straightforward that I can share it all here. You can actually check out our investment Bootcamp to learn more if you're keen - https://notice.shareinvestor.com/email/2020_Inv...

1) look at chart. Long term trend. (Up, down, horizontal)

From financial statment.
2) increasing revenue last 5 year
3) cash > debt (current)
4) increasing cashflow last 5yr
5) technical analysis to see entry point

More advance
6) calculate the stock intrisic value ( discounted cashflow model). Just type the formula into excelsheet

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