Question

In: Finance

How often should Stock be Assessed?

Expert Solution

For assessing the stock of an investible grade company you need to look into its :

1. Qualitative Aspect

2. Quantitative Aspect

Qualitative Aspect includes assessing :

a. Promoters

b. Shareholders

c. Related Party Transactions

d. Corporate Governance

e. Management's Background

f. Business Ethics

Quantitative Aspect includes assessing :

a. Financial Ratios

b. Cash Flow from various Activities

c. Working Capital Management

d. Operating Efficiency

e. Working Capital Management

f. Pricing Power

g. Dividend Decision

h. Profitability and its growth.

Go through the companies Annual report to get an insight about the company, its future plans, sector in which the company is etc. In Annual Report you have to look into :

a. Management Discussion & Analysis

b. Director's Report

c. Report on Corporate Governance

d. Financial Highlights

e. Auditor's Report

f. Any other reporting requirement from an Independent Auditor like CARO in India.

After going through and gathering all these information compare it from previous year's performance of the same company, compare it with its peers in the sector. And, then draw a conclusion

All this exercise is called Fundamental Analysis.

jeff jeffy answered 1 year ago

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