How this topic that might have an impact on you as a student. Explain each item as to how it influenced you?

 

1)Fundamental Analysis

2)Financial Reporting

3)Forecasting

4)Balance Sheet

Fundamental Analysis

The primary objective is to arrive at a value which could be compared with the current market price of a security, so as to ensure whether a security is undervalued or overvalued.

It focuses on determining the intrinsic value of a security based on financial parameters including efficiency and effectiveness of the management. It studies the overall economic health of an entity to assess its securities fair value.

Financial Reporting

It is the manner of communicating financial performance/results of an entity for a particular time period to the investors both present and potential.

Financial reporting includes preparation and presentation of the balance sheet, income statement, Cash flow statement, Statement of changes in Equity, annual report and may more such informations.

These are guided by GAAP, IFRS and accounting framework

Forecasting

It's a process of predicting the future estimates based on certain historical data which are adjusted as per the current scenario and future probabilities.

Forecasting is used to prepare Budget, projecting the future price of security etc.

Such forecasting involves rigorous research and studies into the past performance of the entity including the strategic decisions of management.

Balance Sheet

It is a statement which resembles the financial position of an entity at a particular date. A balance sheet contains the assets, liabilities, classified as Current and Non Current. Further it shows the Equity shareholders fund, number of shares authorised and issued.

It is a reliable source of information and assist in predicting of entities future growth.

This is accompanied by Notes to accounts or schedules that provides a detailed breakup of every financial statement line items.