FUNDAMENTAL ANALYSIS

COMPANY PROJECTION
IN DIFFERENT SECTORS
FUNDAMENTAL ANALYSIS
 IT EXAMINES THE ECONOMIC DEVELOPMENT,
ENVIROMENT INDUSTRY PERFORMANCE AND
COMPANY PERFORMANCE BEFORE MAKING AN
INVESTMENT DECISION.
 A fundamental analysis believes that analyzing the
economy, strategy, management, product,
financial, status and other related information will
help choose shares that will outperform the
markets & provide consistent gains to the investor.
 It examines the underlying forces that affect the
interest of the economy, industry, company. It
focus on economic data to evaluate the present &
future growth of the nation
EXAMINES
 At the industry level = Supply & demand
force for the product business cycle etc…
 At the company level = financial data,
Management, policies, business vision
competitive strength, so on…
 At the economy level = GDP, Govt financial,
Govt borrowing, consumer durable good,
non- durable goods, capital goods market,
saving and investment pattern interest
rates, inflation tax structure, foreign direct
investment, money supply….
TOOLS OF ECONOMIC ANALYSIS
 GDP
 MONETARY POLICY AND LIQUIDITY
 INFLATION
 INTEREST RATES
 INTERNATIONAL INFLUENCES
 CONSUMER SENTIMENT
 FUSCAL POLICY
 LONG & SHORT TERM EXPECTATION.
 THE NATIONAL ECONOMY
 EFFECT OF THE
INTERNATIONAL ECONOMY
ON THE NATIONAL
ECONOMY
MAKING FINANCIAL PROJECTIONS

 Whether you are seeking funding from investors

or you are compiling a business plan to serve as a
blueprint for managing and monitoring your
business, it is imperative that you make financial
projections. Such financial projections will
attract investors and serve as a guide to future
business decisions
 Financial projections can be intimidating.
However, they are less a matter of mathematical
aptitude and more a matter of your knowledge
of your business, the industry, and the market
PROJECTIONS
 Tomake projections, such
as sales forecasts, break
down sales into
manageable parts
EXAMPLE
 Ex:- First outline the products and services
you offer, the unit price for each item, the
anticipated inventory, projected sales
per item for each day, week, month, etc.
You will base these numbers on your
experience in the industry and research.
Finally, make an educated guess regarding
total sales. Using the same procedure,
calculate your expenses or startup costs if
launching a new business. Use a template or
sample as a guide.
ESTIMATES
 Estimates, such as sales, are not
simply based on knowing the number
of people in your demographic
region and making an educated
guess as to how many will opt to use
your product or services in a given
time frame. Sales are projected in
line with your marketing strategy.
EXAMPLE
 For example, if part of your plan is to do a
bi-monthly direct mailing to 10,000 people in
your demographic group, and you estimate
that a 1 percent response to that mailing will
result in sales at your store, then you are
estimating that 100 people will make a
purchase in two months, or 50 per month. If
the average sales item in your store is $200,
you are looking at an estimated $10,000 per
month using this means of marketing. Of
course, you may choose to take a
conservative approach and estimate $7,500.
FINAL ANALYSIS
 Break down each method of marketing used
to attract customers. In the end, review the
plan to make sure everything is included.
 Finally:
 Ask other people in the industry, whom you
trust, to review the financial plan.
 Match your financial forecasts against that
of sample plans.
 Recheck all numbers and calculations. Look
for any risks that could impinge upon your
plan.
BEAHAVIOUR OF ECONOMIC INDICATORS AND
THEIR SUGGESTIVE IMPACT ON THE SHARE
MARKET
ECONOMIC INDICATOR SITUATION IMPACT ON THE SHARE
MARKET
GDP GROWTH + = BULLISH
DECLINE - = BEARISH
CONSTANT + = BULLISH
INFLATION INFLATIONARY/ - = BEARISH
DEFLATIONARY PRICES + = BULLISH

UNEMPLOYMENT INCREASE - = BEARISH

DECLINE + = BULLISH
INDIVIDUAL SAVINGS INCREASE + =BULLISH
DECLINE - = BEARISH
INTERST RATE HIGH -= BEARISH
LOW + = BULLISH
EXCHANGE RATE FAVOUR ABLE + = BULLISH
(STRONGE) - = BEARISH
UNFAVOURABLE
(WEAK)
DOMESTIC HIGH -= BEARISH
CORPORATE TAX LOW + = BULLISH
RATE
BALANCE OF RATE POSITIVE TRADE + = BULLISH
BALANCE(EXPORT - = BEARISH
ARE GREATER THAN
IMPORT).
NEGATIVE TRADE
BALANCE(IMPORT
GREATER THAN
EXPORT).
EXAMINATION
EXAMINATION WITH DIFFERENT
SECTOR.
 AUTO
 BANKING
 CEMENT
 ITSS
 STEEL
 RETAIL
 TELECOM