Warren Buffett had once said, a market crash provides us with a rare opportunity to profit by buying great companies at cheaper prices.
So what is a great company? What Warren Buffett meant was a company with solid business fundamentals.
How to find a great company? That is the million dollar question.
In this post, I would like to explain the process of analyzing the fundamentals of a company and point out some aspects of the process that makes it challenging for non-professional retail investors to do so.
To set expectations, I will not go into the technical details of fundamental analysis or valuation methods. My aim is just to explain the general concepts.
Fundamental Analysis
To quote investopedia: Fundamental analysis (FA) is a method of measuring a security’s intrinsic value by examining related economic and financial factors.
So the goal of fundamental analysis is to measure the true value of...