Fundamental analysis is a method of evaluating the intrinsic value of a security or asset by analyzing economic, financial, and other qualitative and quantitative factors. It involves studying the underlying financial and economic data of a company, industry, or market to determine its current and future prospects.


Some of the key factors that fundamental analysts consider include:


Financial Statements: This includes analyzing a company's balance sheet, income statement, and cash flow statement to understand its financial health, profitability, and cash flow situation.


Industry Trends: Fundamental analysts examine the industry trends and dynamics that affect a company's operations, such as market growth, competition, regulatory changes, and technological advancements.


Macroeconomic Factors: Analysts also consider broader economic factors such as interest rates, inflation, GDP growth, and unemployment rates to gauge the overall health of the economy and the potential impact on the company.


Management Quality: The quality and competence of a company's management team, including their experience, track record, and strategic vision, can also be a significant factor in determining a company's potential for success.


By analyzing these and other factors, fundamental analysts aim to determine the intrinsic value of a security or asset, and whether it is overvalued or undervalued relative to its current market price. If a security is undervalued, it may be considered a good investment opportunity, while an overvalued security may be a candidate for selling or shorting.


Fundamental analysis is widely used in investment research and decision-making, particularly in the stock market. However, it is not a foolproof method and requires ongoing analysis and assessment as market conditions and company fundamentals can change over time.