Fundamental Analysis Overview

What this video covers

• What intrinsic value is, and why undervalued (intrinsic value above market price) is the attractive buy signal
• Why fundamental analysis requires BOTH quantitative data (earnings, ratios) and qualitative data (management, brand, competitive position)
• How to spot top-down analysis (starts with the economy and gross domestic product (GDP)) versus bottom-up analysis (starts with the individual company)
• The three primary financial statements and their time dimensions: balance sheet as a snapshot at a point in time, income statement and cash flow statement covering a period of time
• Why footnotes are testable: accounting methods, contingent liabilities, off-balance-sheet items, and material risk disclosures
• The four auditor opinions (unqualified, qualified, adverse, disclaimer) and why an unqualified (clean) opinion is the most favorable despite the counterintuitive name
• How the Securities and Exchange Commission (SEC) annual report filing requirement ties audited financials to the analyst's intrinsic value estimate