Quantitative and Qualitative Methods

If investors want to conduct fundamental analysis for stocks, quantitative and qualitative methods are integral.  Quantitative methods are conducted through numerical and statistical equations taken from a company's financial statement, including profits, revenues, assets and liabilities.  Analysts will often employ a lot of ratios to examine a company's financial condition.

Qualitative analysis concentrates on other aspects of a company, such as the level of integrity of the board of directors and the management, brand name recognition, patents, and competition.

Analysis is based on current and historical data. It's very important to know if the company you want to invest your money in is worth the financial risk.  What level of risk are you willing to accept for the potential returns? What is the company’s level of revenue growth? Is the company making profits or losses? How does the company perform compared to average industry standards?  How does it compare with its competitors? What level of credibility do the Board of Directors and Top Management have? In summary, prospective investors should always learn as much information about a company and its related industry prior to purchasing company securities.