Microeconomic or core business analysis is extremely important for stock-picking, and please consider it the most critical part. Analyzing the company’s financial development – and thus the profit and loss statement, balance sheet, and CF statement- will undoubtedly provide you with a detailed overview of the company’s operations, which will help you make investment decisions. We briefly define individual terms and show unique examples. However, analyzing these indicators can be laborious, but it can pay off all the more in the long run.
We will discuss the detailed analysis of each fundamental part in separate chapters, which are extremely important. We will discuss the opportunities, pitfalls, risks, and potentials that we can learn from these statements. Below we will give them a very brief introduction separately, but as we said, we will reserve the next chapters for that. Don’t worry. You won’t lose anything. This chapter will help you gain basic knowledge in analysis and help you “get it going.”