Advanced Fundamental Analysis - Valuation
Are financial statements all that you need?
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When it comes to valuation, there’s a lot more beyond the financials of a company. The annual report, research reports and analyst reports – they’re all important.
Are financial statements all that you need for valuation? No, there’s a lot more to valuation than merely the financials. The annual report is a key element. It tells you a great deal about the quantitative and the qualitative characteristics of a company. You also need to study research reports to gain more insights into the company. And explore analyst reports to understand an expert’s take on the company’s worth. Beyond this, it is also important to assess the competitive advantages that the company has. What are its strengths? Its weaknesses? And what are the opportunities and threats before the company? Next, you need to assess the macroeconomic factors And the microeconomic factors That influence the company’s future prospects. Factoring in all these metrics helps you build a strong valuation model. Curious to learn more about the universe outside of the financials? We’ve covered these in the upcoming chapters of Smart Money.