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Analysing common stock (Economic Analysis (Key Factors (Monetary Policy,…

- - - - The discount rate used to translate those future cash flows into present value
      - The risk associated with future performance, which helps define the appropriate discount rate
      - Estimates of the stock's future cash flows
    - - Intrinsic Value provides a measure of the underlying worth of a share of stock, it provides a standard for helping you judge whether a particular stock is undervalued fairly priced, or overvalued
      - Security analysis consists of gathering information, organising it into a logical framework, and then using the information to determine the intrinsic value of common stock
    - - Economic analysis: assesses the general state of the economic and its potential effects on business
      - Industry analysis: deals with the industry within which a particular company operates, and it looks at the overall industry and at how companies compete against each other in that industry
      - Definition: It begins with economic analysis, moves to industry analysis and then arrives at a fundamental analysis of a specific company
      - Fundamental analysis: Looks at the financial condition and operating results of a specific company, it include the company's investment decision, the liquidity of its assets, financial position, profit margin and growth of earning
- - - - 2. Using industry standards, investors compare a particular company's ratio to whose of other companies in the same line of business
      - 1.Using historical standards, investors compare the company's ratio from year to next
    - - 3. Leverage
      - 4. Profitability
      - 2. Activity
      - 5. Common-Stock, or market measures
      - 1.Measuring Liquidity