𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗦𝘁𝗼𝗰𝗸 𝗙𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀: 𝗬𝗼𝘂𝗿 𝗣𝗮𝘁𝗵 𝘁𝗼 𝗦𝘂𝗰𝗰𝗲𝘀𝘀 𝗮𝘀 𝗮𝗻 𝗔𝗻𝗮𝗹𝘆𝘀𝘁

Stock fundamentals are key metrics and info that help investors and analysts determine the intrinsic value of a company's stock. Students aspiring for hashtag#investmentbanking and hashtag#globalmarkets roles must know these basics to get insights into the firm's financial health, performance, and prospects even before complex financial modeling:

𝗖𝗼𝗺𝗺𝗼𝗻 𝗦𝘁𝗼𝗰𝗸 𝗙𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀:

➡️Earnings and Revenue: Crucial indicators of its financial performance. 

➡️Dividends: Payments made to shareholders from company profits. These are similar to regular payouts, like interest in a savings account, offered by companies from their profits.

➡️Cash Flow: Cash flow represents the amount of money flowing in and out of a company. A positive cash flow indicates that a company is generating more cash than it is spending. This is essential for the firm’s operational and investment activities.

➡️Price-to-Earnings (P/E) Ratio: A valuation ratio that compares the current stock price to earnings per share. It helps assess whether a stock is overvalued or undervalued. These ratios gauge a company’s share price relative to its earnings per share. For instance, a P/E ratio of 20 indicates that the investors pay $20 for each $1 of earnings. One can find the P/E ratio by comparing the latest market price with the cumulative earnings of the previous 4 quarters.

➡️Price-to-Book (P/B) Ratio: It compares a stock's market value to its book value, indicating whether a stock is under or overvalued.

➡️Debt Levels: Understanding a company's debt and how it's managed is crucial.

➡️Balance Sheet: The balance sheet offers a good look of a company's financial position at a specific point in time. 

➡️Return on Investment (ROI): ROI measures the profitability of an investment relative to its cost.

➡️Return on Equity (ROE): This evaluates a company's ability to generate profits from shareholders' equity.

➡️Market Capitalisation: The total value of a company's outstanding shares.

Stock fundamentals also provide insights into the long-term prospects of an organisation plus any risks associated with investing. Since markets may not be efficient at accurately pricing stocks, fundamental analysis is more reliable in identifying overvalued or undervalued opportunities.

3 Stock Essentials

1️⃣ Company Research: How the company makes money? Dig deeper into what kind of services they offer or what they manufacture, how many countries they operate in, their flagship product and its sales, and whether they are considered a leader in the industry?

2️⃣ P/E Ratio

3️⃣ Beta: The measure of a company’s stock volatility over the last 5 years in comparison to the overall market. Beta is found alongside the P/E ratio on stock research pages. Defensive stocks usually have a low beta (less than 1.0)