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I have explained most of the concepts used while doing fundamental analysis in English. I hope this article will help you understand fundamental analysis.

•What is Fundamental Analysis

•Intrinsic Value

•Market Capital

•Earnings Per Share

•What is PE Ratio

•Book Value

•PB Ratio

•Debit to Equity Ratio

•Dividends

•Shareholding Pattern

•Promoter Pledge

•How to make a checklist

•Revenue/Profit/Net Worth

How to Select Best Stock For Investment

What you are going to learn or read today is very important. When you want to start investing in the stock market or have started, even then this article is very important for you people because if you run into any field without learning or studying, then you have very little chance of being successful in that field because no one can gain knowledge without studying.

Fundamental Analysis For Beginners in Stock Market

When you invest money in the market, will you invest without thinking? What is needed to be seen in fundamental analysis? Is there a need to analyze and what do you people need to learn for that? Basically, we are going to talk about this topic This Is Fundamental Analysis

If you want to invest, then it is necessary to do fundamental analysis. If you want to do trending, then it is necessary to do technical analysis.

Today we are going to talk about fundamental analysis. Stay till the end of the article!

Fundamental Analysis means that we earn maximum profit from the market

How will we earn profit when we buy shares at low prices and sell them at high prices

Intrinsic Value:- When we buy any goods, what value did we get in return for it or not?

For example, suppose I went to a street vendor and ate a samosa for ₹10 and enjoyed it there, but I ate a samosa at a restaurant for ₹25 and did not enjoy it as much as I enjoyed the samosa sold by the street vendor. If the same street vendor had taken ₹20 instead of ₹10, even then the value of the street vendor’s samosa would have been more than the restaurant’s samosa.

Already, here we compared its value in place of its price and gave it a Face Value. Similarly, I understand from the example of real estate.

Suppose there are two properties and the price of both is one crore each!

But the location of the first property is at a place where there is a school, hospital, metro station and park nearby.

But the location of the second property is at a place where there is no good school, no good hospital, no metro station, no park and no mall!

The first property was getting more value and its value is matching with its price!

But the price of the second property is also one crore and its value is much less as per its price!

Same thing happens with shares!

Suppose I have two shares and the face value of both is ₹200, the fair value of the first share is ₹200 and the fair value of the second share is ₹250.

HOWEVER, THE Fair Value Of Both Is The Same!

And the second share is undervalued, that is, its price is higher!

So in such a situation, which share will you buy, will you buy an overvalued share or a fair value share?

OBVIOUSLY, if you Buy a fair value share, then Intrinsic value helps in Knowing which share is at Face Value And which share is Overvalued! In Stock

Intrinsic Value:- It helps us to know which share we are getting at a cheap price and which one is getting at a high price!

The second thing that comes in Fundamental Analysis is Market Cap

Market Cap:- Market Cap means that if you want to buy a whole company, then how much money will you have to pay, this is called market cap

Market cap helps us to know how big the company is and how small it is, like if the company is big, the risk in that company will be less, but if the company is small and is growing now, then the risk in that company will be more!

After this comes PE Ratio

PE Ratio: Price/Earning

What is the use of PE Ratio

By looking at PE RATIO, it is ascertained that how much money we should invest in which company and how much profit will be there

For example, if you invest 2500 in Reliance, then you will get a profit of ₹100

When we have to look at PE Ratio, then we should see that the lower the PE Ratio, the better it is considered!

For example, if PE Ratio is 1,2,3, then it is considered the best!

1 PE Ratio MEANS THAT IF YOU INVEST ₹1, you will Earn ₹1 in 1 year.

You have to decide for yourself whether you will invest in a place where you will earn ₹100 in a year by investing ₹2500 or you will invest in a company where you will earn ₹100 in a year by investing ₹500. You have to ask this question to yourself!

So PE Ratio will help you to know where you can earn more profit by investing less money. Many times it happens that despite the PE Ratio being high in the industry, there is still profit!

Book Value
Before understanding PE Ratio, let us understand Book Value

Book Value means if this company closes today, how much money will you get in exchange of one share or it depends on the book value

PB Ratio = Price/Book Value
For example, the price of Reliance was around Rs 2500 and its book value is around Rs 1200. If we decide between these two, then the PB Ratio of both comes out to be 2:19, which means if Reliance Industries closes today, you will get Rs 1 for Rs 2.You must have understood the PB Ratio!

But how will we know which PB Ratio is good!

The lower the PB Ratio, the better it is. The maximum PB Ratio of 1.2 is the best!

Debit To Equity Ratio:-Debit To Equity Ratio is very important because by looking at it we can find out a lot about the company!

Debit:- means the one who lends money to the company in exchange for some percentage

Equity:- means the one who gives money to the company in exchange for ownership!

Equity holders are the owners of the company!

Debt holders are the debtors of the company

The lower the company’s Debit to Equity Ratio, the better it is considered!

Dividend:- means how much dividend the company has given to its shareholders

That is, how much part of its profit has it distributed among the shareholders

By looking at the dividend, we can find out how the fundamentals of the company are!

If the company is paying more Dividend, then it simply means that the company is earning more profit, so it is distributing more dividend to the people!

Dividend does not matter much but if the dividend is high then it is good! But if there is less then also there is no problem!

For example, if the share holding pattern of a company is high and the holding percentage of a domestic institution or a foreign investor is high, then here it can be guessed that this company will grow in the future or that company has potential, only then foreign investors and domestic institutions are investing in that company because these domestic institutions or foreign investors are professional people! Professional institutions are their job to invest, so those people are very expert in this work and they invest money in any company after doing very deep research in any company!

A part from this, there is a promoter’s pledging. Now here you people think that who would know the best about any company, that person who is the owner of that company!

So you people think that if the share of this owner is less in this company, then what does it mean? If the share market of that owner is more in that company, then it means that he has faith in that company that the company will do well in the future.
The person who has opened the company does not trust his company and his share in that company is less, that is, if his pledging is big, then this is a bad sign. If this person himself does not trust the company, then how will any outside investor trust that company. Apart from this, if the pledging of the promoter of any company is less, then it can also mean that maybe the promoter of that company, who has opened that company, is feeling that maybe his company will grow in the future or not, that is why his pledging is less. So to understand these things, Promoter Pledging is seen!

Balance Sheet:- Checking the Balance Sheet of the Company. Whatever company it is, it sells something or the other, whether it is a service or a product. The sales that are made from it, that is, the revenue that is generated from it!

The earnings from it are called Top Line and there is Profit. What remains after deducting the expenses is called Profit and this is the Bottom Line.

How will we know whether a company is performing well or poorly!

So look here there are two things, one is Asset and the other is Liability.
Important Things to Know Before doing Fundamental Analysis

1》Always Invest in Making Company Don’t Take Risk avoid loss making company

2》Invest in future Demand Company

Invest in such company which is necessary in future

3》 Invest in such company which looks like At Monopoly

4》Avoid Small Company Who Have Big Competitor

5》Growth In Profit And Networth Earning Profit Increasing Profit Increasing Net Worth

Is that company growing with time or not

6》Peer Company Analysis Company in Best Company

7》Access to Reliable News

8》Know Your Risk Taking Capability

No Risk Invest in Large Cap Company Low Profit, Low Risk

You guys make a checklist:-

Intrinsic Value
PE RATIO
PB Ratio
Debit To Equity Ratio
Share Holding Pattern
Growth in Profit and Networth

Your Thoughts
What do you feel about the shares of that company, what do you believe, what is your feeling, will that company do anything in the future or not, you have to ask this question to yourself

Conclusion:- In this article, we have explained about fundamental analysis in full detail, if you take out your valuable time and read this article in full detail once, then it will be very easy for you to invest in the stock market and to get such share market related education, stay tuned with 24 News Campus Online, thank you

Technical Analysis For Beginner –

https://24newscampusonline.com/what-is-technical-analysis-basic-to-advance/: Fundamental Analysis Complete Guide! How to Select Best Stock For Investment