Quantitative approach
Company analysis here has two approaches: one is qualitative, and another is quantitative; we discuss the qualitative approach. In fundamental analysis, we analyze industry and economic analysis but investment selection on a company based on industry analysis
is a tiring job a part of this analysis of a company is necessary for
future growth because future performance is important for investment.
Key points of qualitative analysis.
1) Business model– Before investment, they should understand the business model such as
●What and how does the company do it?
●Who are the customer
●How the company serves its product or services.
1)Invest in the company when you understand the business well.
2)Know the competitors required to find out how one company is distinguished from the other one.
●Presence of brand
●Ethical history
●Takeover /acquisition
●Monopoly
●Large dustrubution network
●High level of customer loyalty
3) Management and goverance – One should know clearly about what management is doing Ethically and what is unethical. Integrity should be in management; it’s alone to run a business ethically. One important line market can tolerate mismanagement but not unethical tangent for a period of time.
4) Pricing -Pricing means a price product and service price should be under the control of management. Price is a function of many parameters. Internal and external Pricing power is generally a function of industry dynamics, electricity of demand brand image, and customer loyalty.
5) Organization structure and business risk- The organization structure should be clear and not depend on the one-person hierarchy. Investors should know how the decision-making process works.
Business risk is also a matter of discussion. Every business has risk many types of risk involved in business. Current risk, interest rate risk. Risks differ from company to company, and business-to-business analysts should know hidden or unhidden risks.