PDSnet Glossary

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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

The study of all factors which will impact the profitability of a company. Typically, the fundamental analyst is asking the question, "How good will this company be as a generator of dividends in the future?" To answer this question he must examine the financial statements of the company, its management, its industry, its markets and many other factors. Fundamentalists spend a great deal of time looking at the balance sheet and income statement, but these documents are always historical - they show you what has happened rather than what is going to happen. The analysis of management usually requires a visit to the company to see first-hand the style and dynamism of its leaders.

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