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A simplified thread about Fundamental Analysis based on old notes.

Ratio : Return, Efficiency, Growth, Cash flow, Valuation & Solvency are major factors to have ratio.

An easy matrix to compare stocks with same category. Like ranking without knowing details of balancesheet 1/n
2/n Price to Book Value, one of the method to know if CMP is overvalued or undervalued compared to Book Value or Value if Liquidated, cases like Jet, Rcom may have BV higher > CPM but doesn't mean it's attractive price, a detailed article to read on BV…
3/n, P/E ratio, Superstar of the Fundamental Ratio. Formula in notes, Everytime result announces, p/e changes as earning changes. As we know stock moves based on expected result, which Amy give expected p/e, so target before result are calculated reverse using new p/e on #FA
4/n, P/E indicates how expensive or cheap CMP, irrespective of the company and the SECTOR.

Key denominator of P/E ratio is ‘Earnings’, and it can be manipulated.

If its earnings are increasing but not cash flows, nor sales, then something is not right.
5/5, PE at stock are compared with Industry PE and peers stock PE to know the significance, but PE alone is not a good ratio to invest, needs to add value with other facts. In next thread, will talk about Growth Ratio.
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