Fundamental analysis

Economic concepts which are used in fundamental analysis

• Economic data which is relevant to trading or investment

A) GDP
B) Inflation - cpi, ppi
C) Employment data- Non-farm payroll(NFP), unemployment rat
D) Interest rates
E) Retail sales
F) Housing market data- housing starts, existing homes sales
G) Trade Balance
H) Consumer confidence index(CCI)
I) Manufacturing and Industrial production data : ISM manufacturing index, industrial production
J) Balance of payment: current account balance
K) Corporate earning reports:
L) Geopolitical events

Important ratios

• Return ratios: ROE, ROCE, ROA

• Efficiency ratios: PBIT margin, PAT margin, EPS, Book value per share, asset turnover ratio, inventory turnover ratio, debtors turnover ratio, days of receivables, days of payable, days of inventory, working capital days, dividend payout ratio, effective tax rate

• Growth ratios: net sales growth, net profit growth, EPS growth

•  Solvency ratios: Total debt to equity ratios, total debt to asset ratio, interest coverage ratio, current ratio, quick ratio

• Cash flow ratios: cash flow per share, free cash flow per share, sales to cash flow ratio

• Valuation ratios: PE ratio, PB ratio, Price to cash flow ratio, EV/EBIT, EV/EBITDA, mcap to sales ratio

Other important factors which are helpful in stock selection

• DII weight increasing:

• Promotors holding:

• Management:

• Value investing

• Momentum investing

• Cyclic investment

• Counter Cyclic investment

other
- Dividend investment (for income)

• Banking

• Auto

• IT

• consumption 

• pharma

• Financial theme

• Alcohol

• Jewelry

• Hospitals

• Aviation

• Data center theme

• Milk theme

• Manufacturing theme

• Marriage theme

• Ethanol theme

• Financial theme

• Water crisis

• Wind/solar/hydrogen/ power transmission theme

• EV battery theme

• Defense theme

• India story

• Monsoon

• Oil

• Value of rupee

• Govt. initiatives

• China plus 1

• Women power

Family houses

Institutions

• What happens to indian stock market if US inflation rises?

• What happens to indian stock market if US recession comes?

• Global(USA, EU, Asian) economic data which affect Indian stock market [inflation, job data, oil prices, interest, dollar index]

• 2025-1-jan macro discussion