What is basic analysis and how to use it?

The basic analysis is a valuation method that examines economic and financial factors to determine the actual value of an asset. This method is used to estimate the future performance of a company or asset. Basic analysis is often used in the valuation of stocks, bills and other investment instruments.

How to make a basic analysis? Here are the steps:

1. ** Understanding of the financial situation **
Financial reports such as the company's income table, balance sheet and cash flow table are examined. These reports show the company's revenues, expenses, assets, debts and cash flow.

2. ** Research of the Sector **:
Try to understand the features of the sector where the company operates, such as trends, competitiveness and growth potential.

3. ** Examination of the Management Team **:
Factors such as the experience of the company's managers, past achievements and commitment to the company are evaluated.

4. ** Investigation of competitive advantages **:
Learn whether the company has unique products, brand value, patents or distribution networks.

5. ** Evaluation of economic conditions and macroeconomic indicators **:
Factors such as interest rates, inflation, unemployment rate may affect the performance of the company.
The aim of the basic analysis is to determine the actual value of a company or being and prepare the ground for investors to make a deeper analysis. This method helps investors make conscious investment decisions.

6. ** Estimation of future gains **:
Analysts often examine past gains and existing trends to estimate the future earnings of the company. These estimates give an idea of what a company's stock price may be.

7. ** Use of valuation rates **:
The valuation rates compare the stock price of a company to the company's earnings, sales or book value. These rates can help determine whether a company's stock is extremely valuable or cheap.

The basic analysis provides investors a framework to determine the real value of a company or being and to estimate its future performance. However, the basic analysis can be complex and time -consuming and usually requires a financial training and experience. Therefore, it is usually best to work with an investment consultant or financial planner.

Which financial reports are important for basic analysis?

The financial reports that are important for basic analysis are as follows:

1. ** Income Table **:
It shows the revenues of the enterprise in a certain period and the expenses of the same period. Reflects the net profit or loss of the enterprise at that time.

2. ** balance sheet **:
Shows the entity's assets such as cash, machinery and debts at a certain date. It helps to determine the financial status of the enterprise.

3. ** Cash Flow Table **:
It shows in detail the cash inflows and cash outlets of the enterprise in a certain period. This table is used to evaluate the cash management and liquidity status of the enterprise.

4. ** Self -Capital Changes Table **:
The table of equity changes shows the changes in the equity accounts of the enterprise during the period. It shows the effect of transactions and events such as stock issuance, dividend payments or capital contributions.

These reports express the process of preparing and presenting various financial documents reflecting the financial situation, performance and cash flow of the enterprise. These reports offer the internal and external stakeholders of the enterprise to evaluate the financial health, profitability and sustainability of the enterprise.