Fundamental analysis means finding out the intrinsic value of any company share.
To do fundamental analysis, you have to read the financial statement of the company, after reading which you can do fundamental analysis.
In the balance sheet of any company, you get information about the current assets, liabilities and shareholder equity.
In the income statement you get information about the profit and loss of the company.
In the cash flow statement, you get information about the cash coming in and going out of the company.
Fundamental analysis ratios are the most commonly used tools.
EPS ratio is a very popular ratio, it tells you about the profit of the company on each share of the company.
To calculate PB ratio, share price is divided by book value. PB RATIO = Share Price / Book Value of Company.
To calculate the ROE ratio, net income is divided by total equity. ROE RATIO = Net Income / Total Equity.
Total debt is divided by shareholder equity to calculate the debt-to-equity ratio. Debt to Equity Ratio = Total Debt / Shareholder Equity.