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Investment Analysis and Portfolio Management Assignment

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Investment Analysis and Portfolio Management Assignment
INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT ASSIGNMENT
BACHELARS OF SCIENCE BANKING AND FINANCE

CLEMENT MUMBO
STUDENT NUMBER BFIN-0521043
THIRD YEAR SECOND SEMISTER
LECTURER- MR. GIBSON KAPILI

26TH September, 2013

QUESTION 1

Describe Fundamental analysis.

QUESTION 2

Describe steps involved in fundamental analysis

Introduction

This assignment aims at describing fundamental analysis and then describes the steps involved in fundamental analysis. Fundamental analysis looks at the qualitative analysis of a company’s fundamental drivers driven by facture numbers and industry analysis while the technical quantitative looks at the performance of a company’s security.

Fundamental analysis by definition is a stock methodology that uses financial and economic analysis to envisage the movement of stock prices. Fundamental data that is analyzed could include a company’s financing reports and non-financial information such as estimates of its growth, demand for products sold by the company, industry comparisons, economy-wide changes, changes in government policies etc. Two forecasting approaches are used, namely; ‘Top-down’ forecasting approach and
‘Bottom- down ‘forecasting approach

Using ‘top-down forecasting approach the investors are first involved in making the analysis and forecast of the economy, then for industries and finally for companies.
Using ‘Bottom’-down forecasting approach, the investor start with the analysis and forecasts for companies then made analysis and forecasts for industries and for the economy

The following are the steps involved in fundamental analysis and we start with the economy, industry and then finally company

2. Industry analysis

The analysis of industry by investor is done through the study of a wide range of data including sales, earnings, dividends, capital structure, product lines, regulations, innovations, and so on.
The first

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