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| The Basics |
What are Fundamentals?
Fundamentals are the financial characteristics of a company. They refer to the amount of debt a business has, the level of profitability, the available cash on-hand, inventory and receivable turns, as well as return on equity, assets, and investment. These characteristics are used in fundamental analysis to determine the suitability of a particular stock or bond for investment. They provide a standard that can be used to compare two businesses in the same industry or sector.
If a company is going deeper into debt and making less money each year, the fundamentals are said to be deteriorating.
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