Fundamental analysis is the study of a company’s financial health. Unlike technical analysis, it reviews balance sheets and ulta beauty stock income statements.
**Key aspects of fundamental analysis**
– **Earnings per share (EPS):** Indicator of company profitability.
– **Price-to-earnings ratio (P/E):** Compares price to earnings.
– **Debt-to-equity ratio:** Shows reliance on debt.
– **Cash flow:** Shows financial stability.
**Qualitative factors**
– Experience and track record.
– Industry position.
– Market share.
**Examples**
– **Apple:** Strong earnings, cash flow, global brand.
– **Coca-Cola:** Reliable dividends, global reach, defensive industry.
– **Tesla:** Innovative yet volatile.
**Limitations**
– Requires detailed financial knowledge.
– Overvalued stocks can rise further.
**Conclusion**
Fundamental analysis is the backbone of value investing. By studying earnings, ratios, and industries, investors build resilient portfolios.
