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Fundamental Analysis

The article and video contain information about Fundamental Analysis. I already discussed some information about it in my previous video Like Market Cap, Net Profit, EPS. This video contains some more information about Fundamental Analysis.

We will learn about Current Price, P/E Ratio, Operating Profit and Growth Factor in this video.

  • Current Price: – It means, in present time, what is the share price value. Example: One share name is Lupin Ltd & it’s share price is 900. That means, it’s current price is 900.
  • P/E Ratio: –   Price to earnings per share. It’s a kind of value, that people expects as annual returns from the company. If any company consistently providing more than P/E value, then it’s a great idea to invest in this company. Example: – If P/E ratio is 15, then people are expecting 15% returns per annul from that company.
  • Operating Profit: – It’s a difference between Sales and expenses of the company.
    Operating Profit = Sales – Expenses
    If operating profit consistently increasing year by year, means the company’s administrative is doing extremely good job and managing the company properly.  The company is growing year by year.
  • Growth Factor: – It’s an especially important thing to remember. Growth factor tell us, the possibility of growth of the company in coming years.
    Growth factor values range is coming under 0 to 10.
Growth Factor Action Need to Take
Greater Than 7 It’s extremely good for investment
Greater Than 4 & Less Than 7 Good for Investment
Greater Than 2 & Less Than 4 Average Share for Investment
Less Than 4 Not good for Investment
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