What is Fundamental (Financial) analysis?
- Fundamental Analysis is a broad term, which includes financial ratio analysis and valuation techniques.
- The bottom line is we're trying to analyse companies. Fundamental analysis is the assessment of a company's current financial and operating position.
- It seeks to understand the economic and competitive environment in which the company operates.
- This assessment is compared against the company's past performance, and also compared against its competitors.
- An assessment is also made of what the future is likely to hold for the company. It evaluates the company's strategies to see if they are likely to help it succeed or cause it to fail.
Unlearn
Drop off learning thinking that financial analysis is looking only at the current situation of the company. It actually encompass a very broad macroeconomy, industry and individual companies.
Relearn
As an NSM, when making decision for strategy setting for my division or sales expenses, start to be sensitive in the financial figures on how it can impact the bottom line (net profit) of my division and subsequently on Pfizer.
1 comment:
Excellent learning.
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