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Fundamental analysis

A method for valuing companies that involves examination of their financial positions and real activities. The starting point for fundamental analysis is that the value of a company is the discounted value of the future flow of profits that it will produce. Fundamental analysis then takes into account data on assets, competitors, debts, earnings, growth, management. And products to predict future profits. See also technical analysis.

Reference: Oxford Press Dictonary of Economics, 5th edt.