Fundamental Analysis of Banking Industry

Abstract

The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. The two types of techniques used by the banking industry for analysis are fundamental analysis and technical analysis, of which most commonly used by the banking industry is fundamental analysis. Fundamental analysis involves examining the economic, financial and other qualitative and quantitative factors related to a security in order to determine its intrinsic value. Fundamental analysis, which is also known as quantitative analysis, involves delving into a company’s financial statements (such as profit and loss account and balance sheet) in order to study various financial indicators (such as revenues, earnings, liabilities, expenses and assets). Such analysis is usually carried out by analysts, brokers and savvy investors. Fundamental analysis can be valuable, but it should be approached with caution. If you are reading research written by a sell-side analyst, it is important to be familiar with the analyst behind the report.