About Online Fundamental Analysis Training
Fundamental analysis involves examining the underlying factors that affect the performance of a company, or industry, or the economy. Like all other analyses, the main aim is to get a forecast and predict the performance of a company subject to various price movements. Fundamental analysis usually involves examining the financial data, company management, and business concept and competition. At the industry level, there could be an examination of the supply and demand forces of the products and services. For a country’s economy, fundamental analysis is likely to focus on the economic data for assessing the present and future growth.
For a stock price forecast, fundamental analysis combines industry, economic and company analyses. If the current price is not equal to the fair value, then the stock could be either over or undervalued and the market price would ultimately gravitate towards the fair value. Fundamental analysts don’t heed to the advice of causal walkers and believe that markets are weak-form efficient. They also believe that prices don’t reflect available information and look to capitalise on the perceived price discrepancies.
The market price of a stock, to a fundamental analyst, tends to move towards its “intrinsic” or “real” value. If the real/intrinsic value of the stock is higher than the current market price, investors are likely to purchase the stock because they know that the price would inch towards that value. On the other hand, if the real value is lower than the market price, investors would book profits and exit their investments. They know that the market price would come down and reach the real value.
While all these may sound simple, the obvious question that comes up is how can you find out the real value of a company? Once you know this, you can compare the real price to the market price and decide whether you’ll invest in the stock (or sell it in case you already have it in your portfolio).
To begin finding the real value of a company, you have to carry out an examination on the present and future health of the economy and the industry to which the company belongs. After analysing the economy, you have to analyse the company. You should analyse the factors that lends the organisation a competitive advantage in its sector over its peers. These factors include experience of the management growth potential, performance history, brand name, whether the company is a low cost manufacturer etc. You have to find out as much information about the company as possible, especially the acceptance of its products and services in the market. Does the company have a “fundamental strength” or a “core competency” which puts it ahead of competition? Does the company have a strong market presence? Does the management constantly uses a large part of its revenues and profits in marketing activities and scouring new customers and has to fight for a fair market share? What other advantage does the company have over its competitors?
Once you understand the company, what it does, and how much it’s involved with the market and customers, you’ll be in a far better position to determine whether the share price of the company is expected to go down or up.
Now that you have understood the basic of fundamental analysis, let’s dive deeper regarding company valuation.
While investing in stocks, all investors want the price to appreciate. Not only do we want higher prices in the future, we want that pretty fast. The challenge, thus, is to find out the stocks that are poised for a breakout.
Some stocks come cheap while others are expensive. Some are worth ₹1,000, while others are available at ₹1. But the stock price isn’t important here. The price doesn’t reflect whether the stock is worthy to be bought. What’s important is whether the company’s valuation is correct and what would be the stock’s price in the future.
If you invest ₹400 in a stock which is trading at a similar price, and then its price goes up to ₹450, you make a profit of ₹50. But if you invest ₹400 in a 40 paisa stock, you will have 1,000 shares with you. Now if the share price jumps from 40 paisa to ₹1, then the ₹400 you invested will now be ₹1,000. Your profit will be ₹600. This explains that price of a share is not important. What’s important is the rise in price of that particular stock. The “percentage” rise of the stock is determining factor here.
If the ₹400 stock becomes ₹450, then it’s a 12.5% rise. This 12.5% rise will only make you richer by ₹50. On the other hand, if the same ₹400 is invested in the 40 paisa stock, and the stock price rises to ₹1, then it’s a 150% rise. The stock has more than doubled and your profit is ₹600.
The point is, while investing in a stock, investors are interested in companies whose share price are expected to rise by a bigger percentage.
Well, it may seem easy to most and a good idea to buy all the cheap 40 paisa and ₹1 stocks being traded at the bourses, hoping that their price would rise by more than 100%. While this may sound good, it can easily lead to some bad times. These small-priced stocks, known more popularly as penny stocks, are usually very volatile. Unless you are sure about the valuations of the company, don’t park your money in its shares. And this is exactly where fundamental analysis is required.
Investors are interested in stocks that are expected to have the highest percentage of rise in the future. But then how does a person compare stocks? How do you compare a stock which is worth ₹400 to the one which costs 40 paisa, and determine which of the two would yield a higher percentage of return? How do you compare between companies that are in different sectors of the economy and are in entirely different industries altogether? How do you know which company is fundamentally strong?
The online fundamental analysis training course description is as follows.
Excel proficiency for analysts:
This is the first section of the course. It covers formatting financial models, the paste special function, logical functions like AND,OR,IF, arithmetic functions like INT, LARGE, ABS, MAX, SMALL, MIN, TRUNCATE, and others, date functions like DATE, WEEKDAY, converting text to string, pivot tables, auto filter, print setup options, comments, grouping tables, protecting worksheet, conditional formatting, cell information, data validation, creating text to column, converting text to string, subtotal function, hyperlinks, check boxes, combo and list boxes, spinners and scroll bar, options button and group boxes.
This section is divided into 36 parts. Here you’ll be introduced to accounting and learn about business cycles, accounting for balance sheet (BS), income statement, and cash flows, financial statement analysis, basics of dividends and share repurchase (in six parts), horizontal and vertical analysis, ratio analysis including cash conversion cycle, solvency ratio, asset turnover, operating and financial leverage, return on investment and Dupont analysis, and case study of the retail sector, study of Asian Paints annual report (in five parts), income statement ratio analysis, BS calculation of solvency ratios, BS working capital inventory turnover, receivables, and payables turnover, the BS cash conversion cycle, IS BS calculation of operating efficiencies, and financial risk analysis, ACC Ltd ratio analysis, Ultratech Cement ratio and its Dupont analysis.
This section covers LIFO and FIFO methods and analytical adjustments, changes in depreciation policy, financial leases, capitalisation versus expensing RD and intangibles, deferred tax liabilities, real estate financial items, real estate lease accounting treatment, lease-level versus asset-level modelling, real estate taxes, accounting adjustments for NAV calculation, annual report analysing and BS equity, equity analysing of profit and loss, financial reporting quality, accounting shenanigans on cash flow statement, and international standards convergence.
Micro and macro economics:
Here you’ll be introduced to demand-supply analysis, followed by a similar analysis on the company and consumer demand, elasticity of demand-supply, efficiency and equity, markets in action, organising production, output and costs, perfect competition, monopoly, monopolistic competition and oligopoly, markets for factors of production, monitoring jobs and price level, aggregate supply and demand, aggregate output price and economic growth, understanding business cycles, fiscal and monetary policy, capital flow and international trade, currency exchange rates, macro economics from the investor’s perspective, overview of the cement industry, its products and technology, structure, demand-supply, trends, regional dynamics, pricing, costing, and profitability analysis, credit themes, financial risk analysis, and stock performance and industry outlook, evaluation of macroeconomics strategy reports and industry analysis porters and five forces.
Corporate finance foundation:
This part includes capital budgeting, time value of money and Excel applications, cost of capital, working capital management, measures of leverage, budgetary control, marginal costing, and corporate governance of listed companies.
The course is mainly aimed at brokers, keen investors, and students from all backgrounds. But working knowledge of finance and accounts will be an added advantage.
The demand for fundamental analysts is likely to outstrip the average demand for other occupations in the finance and investment domain over the next few years. The demand-supply mismatch would only help aspirant fundamental analysts to get a higher remuneration. There have been increasing investment activities in the recent years. Going ahead, more qualified fundamental analysts would be required for assisting investment planning. Besides, a shortage of strategic financial analysts in India is expected to continue as financial management institutes and professional institutions fail to churn out experts in adequate numbers.
Financial markets are expanding all over India and there has been a tremendous growth in the sector. Plenty of jobs have opened up for fundamental analysts. Post-liberalisation, there has been a boom in FDI, IPOs and FIIs. All these call for the knowledge of fundamental analysis.
The mutual fund market too is expanding. Mutual funds and asset management companies (AMCs) require fundamental analysts to carry out company valuations. They advise fund managers on which funds to invest money. The investment banking sector too is expected to rise in the near future and would require the services of qualified analysts. There will also be an increased demand of these professionals to carry out cost, sales, commodity price, tax estimates, and similar functions
FAQs: Some general questions
- What is the scope in the online fundamental analysis profession?
According to latest surveys by various firms, financial markets hold immense potential as a career option. Fundamental analysis is one of them. There would be a global requirement of four lakh skilled professionals to fulfil the requirements.
- Will the course help me to set up my own business?
The fundamental analysis training course provides exhaustive knowledge of the capital market. You can set up your own business as a consultant, broker, investment advisor, and provide equity market tips to investors. You can also work as an independent fundamental analyst.
- Is the course for students or professionals?
Both students and professional can join the course. But you should have a basic knowledge of stock markets.
“It’s really overwhelming, the way EduCba imparts a complete knowledge of fundamental analysis. I really benefitted from the course. The information shared is awesome and it comes from an expert faculty.”
“I am a broker by profession and was looking to expand my knowledge. After taking the online fundamental analysis course, I am better equipped to perform in the markets. The course imparts perfect knowledge and you become a perfect fundamental analyst.”
“It’s a great course and you can learn a lot. I really loved to learn about analytical previews and how to analyse the future market expectations. The course has helped me to set a stable trading strategy.
After successfully completing the online fundamental analysis training course, you can pursue a career in currency trading, commodity research and trading, equity research and trading, fundamental and technical analysis, and quantitative and derivatives trading. Credit research bureaus and big broking houses also employ fundamental analysts.
|Where do our learners come from?|
|Professionals from around the world have benefited from eduCBA’s Online Fundamental Analysis Training courses. Some of the top places that our learners come from include New York, Dubai, San Francisco, Bay Area, New Jersey, Houston, Seattle, Toronto, London, Berlin, UAE, Hong Kong, Singapore, Australia, New Zealand, Bangalore, New Delhi, Mumbai, Pune, Kolkata, Hyderabad and Gurgaon among many.|