WHILE PURCHASING SHARES THERE ARE TWO ASPECTS
1.QUALITATIVE ASPECTS
2.QUANTITITATIVE ASPECTS.
QUALITATIVE ASPESTS: COMPANY ANALYSIS CAN BE DONE AFTER ANALYIZING OVERALL STATE OF ECONOMY.IT IS THE FINAL STAGE OF FUNDAMEMNTAL ANALYSIS WHERE STOCK INVESTORS ANALYZE BOTH QUALITATIVE AND QUANTATATIVE ASPECTS OF VARIOUS COMPANIES WHICH ARE GOOD FOR LONG TERM AND SHORT TERM INVESTMENTS.
WARREN BUFFET HAS HIS SAY AND HE IS CONCERNED ABOUT TWO THINGS
1.THE FUTURE OF COMPANY
2.COMPETENCE AND VISION OF ITS MANAGEMENT.
A GOOD MANAGEMENT ALWAYS RELAXES INVESTORS THOUGHT PROCESS IT HELPS A COMPANY EVEN IN BAD TIMES .IF A COMPANY IS RUN BY POOR MANAGEMENT IT CAN FAIL TO PERFORM EVEN DURING TOUGH TIMES.
THERE IS NO RULE OF THUMB FOR EVALUATING MANAGEMENT OF A COMPANY.BUT THERE ARE NUMBER OF FACTORS WHICH EFFECTS TO ANALYZE A QUALITY OF A MANAGEMENT..
QUANTITAIVE ASPECTS:
THERE ARE NUMERICAL CHARACTERSTICS OF A BUSINESS .THEY RESOLVE AROUND FINANACIAL NUMBERS.THEY ARE FOR EXAMPLE:BALANCE SHEET,PROFIT AND LOSS ACCOUNT ,CASH FLOW STATEMENT ETC.
THE CHARACTERSTICS OF A QUANTITATIVE ANALYSIS ARE
1.HOW THE COMPANY IS CURRENTLY RUNNING AS COMPARED TO PREVIOUS YEARS?
2.HOW COMPANY PERFORMED AS COMPARED TO OTHER COMPANY DURING SAME PERIOD OR PREVIOUS YEARS.