Factors of Fundamental Analysis

A company is to be analyzed on fundamentle basis on the basis of following factors :-

• Profitability :- Company's ability to income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on theincome statement, which reports on the company's results of operations.
• *Solvency :- Company's ability to pay its obligation to creditors and other third parties in the long-term.
• *Liquidity :- Company's ability to maintain positive cash flow, while satisfying immediate obligations.
• Stability :- Company's  ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of both the income statement and the balance sheet, as well as other financial and non-financial indicators.

*Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition of a business as of a given point in time.