Section 1 · Module 1.10
Fundamental Analysis Primer
7 min readP/E playground
P/E = 20.0×
Common mid-band for quality growers — still not a buy signal
Try it: Drop EPS while price stays high — watch the multiple explode.
What Fundamental Analysis Asks
Remember: FA frames valuation — it does not predict tomorrow’s candle.
Technical analysis studies price and volume. Fundamental analysis (FA) studies the business: earnings, balance sheet strength, cash generation, and valuation versus peers.
FA does not predict next week's candle — it frames whether a stock looks expensive or cheap relative to its economics. Educational context only.
Core Statements (Very Short Tour)
- Profit & loss: Revenue, expenses, operating profit, net profit / EPS.
- Balance sheet: Assets vs liabilities — debt load and shareholder equity.
- Cash flow: Operating cash versus accounting profit; investing and financing flows.
Listed companies file quarterly results and annual reports under SEBI disclosure norms — start from exchange / company filings, not tip screenshots.
Ratios Beginners Meet First
| Ratio | Rough idea |
|---|---|
| P/E | Price ÷ earnings per share — popularity vs profits |
| EPS | Profit attributable per share |
| ROE | Return on equity — profit vs shareholder capital |
| D/E | Debt vs equity — leverage risk |
| P/B | Price ÷ book value — common for banks / asset firms |
High or low ratios are sector-specific. Compare a bank to banks, not to a SaaS peer.
FA + This App
Our TA signals and tools emphasise price, breadth, and derivatives positioning. Use FA as a second lens when you hold CNC for weeks or months — after you finish Intermediate charting modules.
Knowledge check
P/E ratio primarily compares:
Tap an answer — you get instant feedback.