{"id":2745,"date":"2021-05-18T17:11:23","date_gmt":"2021-05-18T11:41:23","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=2745"},"modified":"2022-12-20T10:22:20","modified_gmt":"2022-12-20T04:52:20","slug":"what-are-the-tools-of-fundamental-analysis","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/","title":{"rendered":"What Are the Tools of Fundamental Analysis of Stocks?"},"content":{"rendered":"\n<p>As of FY 2021, there are over 7,462 companies listed in the Indian <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a>. And trying to pick one or more stocks from 7,000+ might make you apprehensive about choosing the best stocks. But a useful approach is to simply understand their value. This is where investors make use of <a href=\"https:\/\/www.tickertape.in\/blog\/a-step-by-step-guide-to-fundamental-analysis\/\">fundamental analysis<\/a> to analyse a company. In this article, let us understand what fundamental analysis is, the tools of fundamental analysis, and its importance and usage.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#What-is-fundamental-analysis\" title=\"What is fundamental analysis?&nbsp;\">What is fundamental analysis?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#A-note-on-fundamental-analysis\" title=\"A note on fundamental analysis\">A note on fundamental analysis<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#What-is-the-intrinsic-value-of-a-stock\" title=\"What is the intrinsic value of a stock?\">What is the intrinsic value of a stock?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Quantitative-analysis-and-its-significance\" title=\"Quantitative analysis and its significance\">Quantitative analysis and its significance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#What-are-the-tools-used-in-the-quantitative-fundamental-analysis\" title=\"What are the tools used in the quantitative fundamental analysis?\">What are the tools used in the quantitative fundamental analysis?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Financial-reports\" title=\"Financial reports\">Financial reports<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#1-The-balance-sheet\" title=\"1. The balance sheet\">1. The balance sheet<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#2-Profit-and-loss-statement\" title=\"2. Profit and loss statement\">2. Profit and loss statement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#3-Cash-flow-statements\" title=\"3. Cash flow statements\">3. Cash flow statements<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Earnings\" title=\"Earnings\">Earnings<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#1-Quarterly-earnings\" title=\"1. Quarterly earnings\">1. Quarterly earnings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#2-Projected-earnings\" title=\"2. Projected earnings\">2. Projected earnings<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Financial-ratios\" title=\"Financial ratios\">Financial ratios<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#1-Earnings-per-share-EPS\" title=\"1. Earnings per share (EPS)\">1. Earnings per share (EPS)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#2-Price-to-earnings-PE-ratio\" title=\"2. Price-to-earnings (P\/E) ratio\">2. Price-to-earnings (P\/E) ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#3-Return-on-equity\" title=\"3. Return on equity\">3. Return on equity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#4-Price-to-book-PB-ratio\" title=\"4. Price-to-book (P\/B) ratio&nbsp;\">4. Price-to-book (P\/B) ratio&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#5-Price-to-sales-PS-ratio\" title=\"5. Price-to-sales (P\/S) ratio\">5. Price-to-sales (P\/S) ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#6-Dividend-payout-ratio\" title=\"6. Dividend payout ratio\">6. Dividend payout ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#7-Dividend-yield-ratio\" title=\"7. Dividend yield ratio\">7. Dividend yield ratio<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Importance-of-financial-analysis-tools\" title=\"Importance of financial analysis tools&nbsp;\">Importance of financial analysis tools&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#How-to-find-fundamental-analysis-tools\" title=\"How to find fundamental analysis tools?&nbsp;\">How to find fundamental analysis tools?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#FAQs\" title=\"FAQs \">FAQs <\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#1-What-is-the-difference-between-fundamental-analysis-and-technical-analysis\" title=\"1. What is the difference between fundamental analysis and technical analysis?\">1. What is the difference between fundamental analysis and technical analysis?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.tickertape.in\/blog\/what-are-the-tools-of-fundamental-analysis\/#2-What-are-the-types-of-fundamental-analysis\" title=\"2. What are the types of fundamental analysis?\u00a0\">2. What are the types of fundamental analysis?\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-fundamental-analysis\"><\/span><strong>What is fundamental analysis?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>While it is difficult to analyse and arrive at the value of anything, good investors are adept at forecasting trends. They use mathematical reasoning and factoring in other intangibles to define stock paths, owing largely to the unpredictable nature of things. A <a href=\"https:\/\/www.tickertape.in\/blog\/stock-analysis\/\">stock analysis<\/a> method that uses these principles is fundamental analysis.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Note\"><span class=\"ez-toc-section\" id=\"A-note-on-fundamental-analysis\"><\/span>A note on fundamental analysis<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Fundamental analysis<strong> <\/strong>and particularly quantitative<strong> <\/strong>fundamental analysis is the searchlight you can use to shine a light on stocks before they catch fire. In simpler terms, it measures the <a href=\"https:\/\/www.tickertape.in\/blog\/intrinsic-value-of-shares\/\">intrinsic value<\/a> of a stock by studying qualitative and quantitative factors affecting it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Intrinsic\"><span class=\"ez-toc-section\" id=\"What-is-the-intrinsic-value-of-a-stock\"><\/span>What is the intrinsic value of a stock?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Intrinsic value is the value of a stock as determined by qualitative and quantitative methods of fundamental analysis. The intrinsic value might be higher or lower than its actual <a href=\"https:\/\/www.tickertape.in\/blog\/market-value\/\">market value<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Quantitative\"><span class=\"ez-toc-section\" id=\"Quantitative-analysis-and-its-significance\"><\/span><strong>Quantitative analysis and its significance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In quantitative analysis, you justify buying stocks by studying the underlying numbers that make a successful company. Simply put, stock prices and shares are numbers. Investment is about maximising those numbers; these factors depend on the company\u2019s numbers.<br><br>\u201cXYZ has good numbers\u201d is common speak for investors while assessing the performance of a company. Quantitative analysis studies these numbers, particularly the financial details of a company, to improve the investor\u2019s chances of hitting on a successful stock.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Tools\"><span class=\"ez-toc-section\" id=\"What-are-the-tools-used-in-the-quantitative-fundamental-analysis\"><\/span><strong>What are the tools used in the quantitative fundamental analysis?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>From earnings and financial reports to <a href=\"https:\/\/www.tickertape.in\/blog\/financial-ratios\/\">financial ratios<\/a>, there are a number of tools used in the quantitative analysis as discussed below.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial-reports\"><\/span><strong>Financial reports<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-The-balance-sheet\"><\/span><strong>1. The balance sheet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The balance sheet of a company contains its assets and liabilities. You can also refer to it as a business&#8217;s <a href=\"https:\/\/www.tickertape.in\/blog\/net-worth\/\">net worth<\/a>. Assets are company-owned and can include things like machinery, equipment, office space, copyrights, holdings and more. Liabilities are what it owes to others like debt and <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a>. High debt or equity usually leads to long-term complications, while a growing company maximises current assets and acquires new ones.<br><br>Check that the company has, or is growing towards a balance sheet where its assets keep growing more than its liabilities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-Profit-and-loss-statement\"><\/span><strong>2. Profit and loss statement<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These statements consist of the revenue and expenses of a company. For example, Google\u2019s revenues would be money received through advertisements and income device sales, play store tax, and so on. Its expenses would include outgoing money through payments towards employees, taxes to the government and so on. <br><br>Profit\/Loss = Revenue &#8211; Expenses<br><br>You need to look for companies whose revenues comfortably exceed their expenses. You should also note that revenues must come from \u2018core\u2019 sources as they have greater stability. Google obtained over 70% of its revenue from advertisements (core source) in 2018.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-Cash-flow-statements\"><\/span><strong>3. Cash flow statements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>They are detailed reports of cash that moved in and out of a business account in a financial year. Cash flow statements measure the cash-based transactions a company makes in a year, including investments. Look for companies that finance most of their requirements through non-cash flow activities, as lesser cash expenditure usually implies a low-risk business.<br><br>Apart from these, some companies also include a statement of change in equity and write notes to the shareholder on their positions. Keep an eye out for companies with complete transparency in all the above reports, so you are not misled by false or lack of financial information.<\/p>\n\n\n\n<p>Understanding a company\u2019s financial reports can differentiate between a risky buy and a confident one. Tickertape <a href=\"https:\/\/www.tickertape.in\/blog\/tickertape-stock-screener-to-discover-largecap-stocks\/\">Stock Screener<\/a> and Stock Pages give quantitative data regarding a company&#8217;s financials, like income statements, balance sheets, and cash flow. You can filter these statements with over 150 <a href=\"https:\/\/www.tickertape.in\/blog\/14-new-filters-on-tickertape-stock-screener\/\">filters<\/a> listing companies based on total assets, total debt, free cash flow, raw materials, and employee cost and make confident decisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Earnings\"><\/span><strong>Earnings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Simply put,<strong> <\/strong>earnings are the money that a company makes. However, you may know them as net income, bottom line or profit; they all mean the same. Take the case of Bata. Subtract all the costs required to produce their footwear, like manufacturing costs, cost of goods acquired, and inventory from their income from sales and franchises, and you will get their earnings (profit). <br><br>Thus, you must <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in companies that have high earnings sustained over a period of time. Higher profits are good business. It is also the same for investment and economics in general. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-Quarterly-earnings\"><\/span><strong>1. Quarterly earnings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Companies release quarterly reports detailing earnings, <a href=\"https:\/\/www.tickertape.in\/blog\/earnings-per-share\/\">earnings per share<\/a> and earnings from current operations for the most recent quarter. This indicates the current standing of a company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-Projected-earnings\"><\/span><strong>2. Projected earnings<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These are notoriously difficult to predict accurately. They are calculated by subtracting forecasted expenses from forecasted income. You can use a company\u2019s financial statements from the current quarter to gauge how it might grow over the next ones.<\/p>\n\n\n\n<p>Investors must pay close attention to profit as it is a key driver of stock value. Strong and sustained earnings are the most important denominators of a successful business. Low earnings force the company to borrow and incur further liabilities to survive, while increased profits make people invest in their stocks. This influx raises their stock price, which again pushes up their earnings.&nbsp;<\/p>\n\n\n\n<p>You can find such companies using <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to create your custom buy\/sell list. Use filters to list down companies based on growth metrics like Historical Earnings and Revenue Growth from 1 yr to over 5 yrs to land yourself solid stock options.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial-ratios\"><\/span><strong>Financial ratios<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Financial ratios are another important tool in quantitative analysis. They offer a clearer view of the company\u2019s financials concerning profitability, expenses, equity, etc.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-Earnings-per-share-EPS\"><\/span><strong>1. Earnings per share (EPS)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These are the earnings of a company divided by the number of<strong> <\/strong>shares<strong> <\/strong>of the company.<strong> <\/strong>Look for companies with high earnings per share so that when you decide to sell, the price of each share will be substantial, boosting your returns. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-Price-to-earnings-PE-ratio\"><\/span><strong>2. Price-to-earnings (P\/E) ratio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This is the ratio of the share price and the EPS of a company. Essentially, it indicates how much you need to pay to get Rs. 1 of a company\u2019s earnings. Ensuring a low P\/E ratio will mean you spend less of your earnings for more of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-Return-on-equity\"><\/span><strong>3. Return on equity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Use return on <a href=\"https:\/\/www.tickertape.in\/blog\/what-are-equity-shares-meaning-types-features-limitations-and-more\/\">equity shares<\/a><strong> <\/strong>to assess the profitability of a company generated by using the shareholders\u2019 money. Divide the net income\/earnings\/profit by equity shares<strong> <\/strong>of investors<strong> <\/strong>to assess this metric. Make sure you choose companies with a high return on equity to maximise your returns. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-Price-to-book-PB-ratio\"><\/span>4. <strong>Price-to-book (P\/B) ratio<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It compares a stock\u2019s book value to its market value. It is calculated by dividing the stock\u2019s last closing price by its previous quarter\u2019s book value per share. Where book value is the cost of each asset minus its cumulative depreciation.&nbsp;<\/p>\n\n\n\n<p>In simple terms, the P\/B ratio tells us what the company will be left with after repaying its liabilities and liquidating the assets. If the P\/B ratio is more than one, the stock is overvalued, and if it\u2019s less than one, it is undervalued.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5-Price-to-sales-PS-ratio\"><\/span>5. <strong>Price-to-sales (P\/S) ratio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a ratio of a company\u2019s stock price to its revenue. A higher P\/S ratio means overvaluation, while a lower value means undervaluation.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6-Dividend-payout-ratio\"><\/span>6. <strong>Dividend payout ratio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is calculated by dividing the total amount of <a href=\"https:\/\/www.tickertape.in\/blog\/cash-dividend-vs-stock-dividend\/\">dividend<\/a> by the net income of the company. It tells how much a company has earned and how much it is giving out as a dividend.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7-Dividend-yield-ratio\"><\/span>7. <strong>Dividend yield ratio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is calculated by dividing the annual dividend by the current stock price. This ratio tells what a company pays as a dividend relative to its share price.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Importance-of-financial-analysis-tools\"><\/span><strong>Importance of financial analysis tools&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Fundamental analysis of stocks helps you determine the fair value of a stock. You can evaluate the performance and health of an organisation. It is essential to check key numbers, the business model of a firm, and its management while investing.&nbsp;<\/p>\n\n\n\n<p>Click here to read more about the <a href=\"https:\/\/www.tickertape.in\/blog\/a-step-by-step-guide-to-fundamental-analysis\/\" data-type=\"post\" data-id=\"9804\">fundamental analysis of a stock<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How-to-find-fundamental-analysis-tools\"><\/span><strong>How to find fundamental analysis tools?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>All the fundamental analysis tools are available on the company\u2019s website, or if you are looking at more than one company, then <a href=\"https:\/\/www.tickertape.in?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape<\/a> is here! You can log in to Tickertape and search for stocks you want to analyse. You get a company\u2019s key information, like forecasts, financials, holdings, etc. You can also use <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to filter the best stocks in India based on your preferred parameter.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You need tools to build anything, and the same applies to building wealth. As of March 2022, India became the 5th biggest equity market with a market cap of $3.21 tn. Sure, we might be far from China with $11.52 tn in the 2nd position and the USA market at $47.32 tn in the 1st position, but we\u2019re definitely in the top 5. Well, top 5 or not, 7,000 stocks is a big number to choose from, but with a determined, filtered focus on your goals, quantitative analysis will help you make stock-picking fundamentally easier.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1671511136652\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"1-What-is-the-difference-between-fundamental-analysis-and-technical-analysis\"><\/span>1. <strong>What is the difference between fundamental analysis and technical analysis?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Fundamental analysis of a stock is about analysing a company and its numbers. In contrast, <a href=\"https:\/\/www.tickertape.in\/blog\/technical-analysis-of-stocks\/\">technical analysis<\/a> looks at the stock&#8217;s price movement and predicts the future price.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671511167889\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"2-What-are-the-types-of-fundamental-analysis\"><\/span>2. <strong>What are the types of fundamental analysis?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Fundamental analysis is classified into two types: qualitative and quantitative. Qualitative analysis determines the company, consumer behaviour, demand, and popularity. In contrast, quantitative analysis involves analysing a company&#8217;s reports, balance sheets, quarterly performance, annual performance, debt, etc.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>As of FY 2021, there are over 7,462 companies listed in the Indian stock market. And trying to pick one or more stocks from 7,000+ might make you apprehensive about choosing the best stocks. But a useful approach is to simply understand their value. <\/p>\n","protected":false},"author":90,"featured_media":2749,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1721,1743],"tags":[291,286,292,293,15],"acf":[],"modified_by":null,"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/05\/Tools-of-fundamental-analysis-.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2745"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/90"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=2745"}],"version-history":[{"count":8,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2745\/revisions"}],"predecessor-version":[{"id":11440,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/2745\/revisions\/11440"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/2749"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=2745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=2745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=2745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}