fundamental analysis

Fundamental analysis typically refers to a method of analyzing and evaluating equities, although it may also apply to any kind of security. At the company level, a great amount of data including, but not limited to, financial statements, economics, health, management, interest rates, production, earnings, competitive advantages, competitors and many other qualitative and quantitative factors are considered. At the industry level, an examination of supply and demand forces for the products offered might be examined. For the national economy, fundamental analysis could focus on economic data to assess the present and future growth of the economy.

As with most analysis, the goal is to derive a forecast and profit from future price movements.

In the equities market, fundamental analysis seeks to measure a company's true value and to base investments upon this type of calculation. To some extent, the same is done in the retail forex market, where forex fundamental traders evaluate currencies, and their countries, like companies and use economic announcements to gain an idea of the currency's true value.