Page 172 - DCOM507_STOCK_MARKET_OPERATIONS

Rupesh Roshan Singh, Lovely Professional University
Unit 9: Fundamental Analysis 3: Company Analysis

Unit 9: Fundamental Analysis 3: Company Analysis Notes

CONTENTS
Objectives

Introduction
9.1 Framework of Company Analysis
9.1.1 Non-financial Aspects
9.1.2 Financial Analysis

9.2 Fundamental Analyst’s Model
9.2.1 Earnings Analysis
9.2.2 Accounting Income Effect on Balance Sheet
9.2.3 Forecasting Earnings

9.3 Determining Earnings – Multiplier (P/E) Ratio
9.3.1 Dividend Discount Model of Valuation
9.3.2 Comparative P/E Approach
9.4 Growth Stocks

9.4.1 Guidelines for Investment
9.4.2 Estimation of Future Price
9.4.3 Quantitative Analysis
9.5 Forecasting Earnings Per Share

9.6 Summary
9.7 Keywords
9.8 Review Questions
9.9 Further Readings

Objectives

After studying this unit, you will be able to:
Explain the framework of company analysis
Discuss the fundamental analyst's model
Elaborate the growth stocks
Discuss the forecasting earnings per share

Introduction

We have discussed the relevance of economy and industry analyses and the manner in which it
is conducted. In this unit, we will discuss the company level analysis. In order to provide a
proper perspective to this analysis, let us begin by discussing the way investor makes investment

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