FANDAMENTAL ANALYSIS
   Fundamental analysis is a method that attempts to predict the 
   intrinsic value or True value of an investment. 
   Fundamental Analysis is based on the theory that the market price of 
   an asset tends to move towards its 'real value' or 'intrinsic value’. 
   In fundamental analysis an investor makes an attempt to study 
   everything that can affect the share price. 
   Investor can look for information about the economy, industry and 
   the company so that he can find a right security to invest in. 
   The ultimate aim of doing fundamental analysis is to find a value that 
   an investor can compare with the security’s current price and on 
   basis of his comparison he finally decides whether to buy an 
   underpriced security or to sell an overpriced security. 
      WHY TO STUDY FUNDAMENTAL ANALYSIS
   
    Before  understanding  about  how  to  do  fundamental  analysis  one  should 
    understand  why  he  should  do  fundamental  analysis.  The  answer  to  this 
    question lies in the fact the all of us are rational consumers. 
           We want more satisfaction for every rupee spent. 
              Everyone wants to maximize his benefit. 
   
    For an example many times when we are at a shop to buy a product we often 
    say to the shopkeeper to tell us the final price of the product at which he is 
    ready to sell as the price told by him earlier are not according to the worth of 
    the product for us. 
   
    The same concept applies here. When we buy a share we are offered with 
    various shares from various companies. Here again the question arises that 
    whether the market price of share is a true reflector of its actual worth or not. 
   
    Thus fundamental analysis helps hereby doing fundamental analysis one can 
    calculate the intrinsic value of
        3 LEVEL OF FUNDAMENTAL ANALYSIS
        Thus the factors that affect a company can be broadly classified as:-
       
           Economic factors like rate of growth of the economy, exchange 
       rates etc.
       
           Industry factors like demand and supply in the industry, 
       competitors in the    
             industry etc.
       
           Company related factors like image of the company and its 
       managers,                                 Fundamental Analysis involves 
             profitability etc.                  the following three analysis
                                                 1)  Economic 
                                                 Analysis,
                                                 2) Industry Analysis, 
                                                 3) Company Analysis.
            ECONOMIC ANALYSIS
  
   Economic Analysis relates to the analysis of the economy.
  
   This related to study about the economy in details and 
   analysis whether economic conditions are favourable for 
   the  companies to prosper or not.
  
   Analysts  always  try  to  find  out  whether  the  economic 
   development is conducive for the growth of the company.
  
   An investor in a security market can give prediction about 
   the future of share price of a company on the basis of the 
   study  of  forces  affecting  economic  environment  of  the 
   country.
     Take an example of Indian economy, when India is increasing its 
     goodwill and building a positive identity internationally it has 
     led to an increase in investors’ confidence in the economy and 
                  in industries.
                FACTORS OF ECONOMIC ANALYSIS
         For  the Economic Analysis, the Macro Economic Factors 
        are studied to know about the condition of an economy or  
            performance of the security market of any country.
                        Some points to be considered
        GDP of the country               Interest rates
        Performance of security          Supply and demand of money
        market
        Inflation rate                   Government borrowings and 
                                         loans
        Taxation policy and rates        Consumer and goods market
        Foreign Direct Investment        Balance of payments etc.   
            The economy is studied to determine if 
           overall conditions are good for the stock 
                                   market.