JoymistaWhat Is Fundamental Analysis?
Fundamental analysis judges an asset from its real data: a company’s earnings, debt and growth for stocks, and interest rates, inflation and growth for currencies.
Explained
Technical analysis asks “what is price doing?”; fundamental analysis asks “why, and what is it worth?”. For stocks it is read from official financial statements, for forex from economic data and central bank decisions. Many traders combine both.
Example
Example with made-up numbersA company grew revenue 20% and earnings 25% in a year with low debt, strong fundamentals, but on their own they do not tell you whether today’s price is cheap or expensive.
Use it in Joymista
Related terms
- P/E RatioThe P/E ratio is the share price divided by the annual earnings per share (EPS): how many…
- EPS (Earnings Per Share)EPS is a company’s net profit divided by its number of shares: each share’s slice of the…
- CPI (Consumer Price Index)CPI measures the change in prices of a basket of goods and services consumers buy, and…
Put it to work in Joymista
Signing up is free, some tools are free, and one subscription unlocks the rest.
Open in JoymistaEducational content, not investment advice.