COMPANY ANALYSIS

COMPANY ANALYSIS:

Company analysis is the final stage of fundamental analysis. The economy analysis provides the investor a broad outline of the prospects of growth in the economy. Company analysis deals with the estimation of return and risk of individual shares. This calls for information.

Many pieces of information influence investment decisions. Information regarding. Companies can be broadly classified into two broad groups:-

·         Internal Information: Internal information consists of data and events made public by companies concerning their operations. The internal information sources include annual reports to shareholders, public and private statements of officers of the company, the company’s financial statements, etc.

·         External Information: External sources of information are those generated independently outside the company.These are prepared by investment services and the financial press.

In company analysis, the analyst tries to forecast the future earnings of the company because there is strong evidence that earnings have a direct and powerful effect upon share prices. The level, trend and stability of earnings of a company, however, depend upon a number of factors concerning the operations of the company.