Fundamental analysis
Business quality, cash flows and valuation without pretending value is one number.
Fundamental analysis asks what an asset represents and what could make it worth more or less. For a company, that means economics, cash generation, financing and the price paid for those prospects.
Business economics
Study revenue drivers, margins, reinvestment needs, competitive position and balance-sheet strength. A growing company can still destroy value if growth requires uneconomic capital or excessive dilution.
Cash flow and accounting
Profit is an accounting measure; cash flow follows actual cash movement. Neither should be read alone. Working capital, capital expenditure, stock-based compensation and debt can change the picture.
Valuation
Valuation links expectations to price. Multiples and discounted cash-flow models are assumption frameworks, not truth machines. Small changes in growth, margins or discount rates can materially change an estimate.
The lesson in three lines.
- 1Company quality and investment value are related but different.
- 2Read cash flow with the income statement and balance sheet.
- 3Valuation is a range based on assumptions.