When it comes to successful investing, the foundation lies in proper stock analysis. Many new and experienced investors focus on price charts and market trends, but real long-term wealth is built through fundamental stock analysis.

Understanding the fundamentals of stock analysis allows you to evaluate a company’s true financial health, sustainability, and future growth potential. With tools like Dhanarthi, analyzing company financials has become simple, fast, and accessible to everyone — even if you don’t have a finance background.

In this guide, we’ll explain how to do fundamental analysis of stocks like a pro using Dhanarthi.

Why Do Fundamental Analysis of Stocks?

Fundamental analysis of stocks is essential because it helps you focus on a company’s core business performance rather than temporary price movements.

Key benefits include:

• Identify strong, profitable companies early
  
  

• Avoid overvalued or risky stocks
  
  

• Build a portfolio focused on stability and growth
  
  

• Make confident, data-driven decisions
  
  

The Basics: Understanding Company Financial Statements

A proper stock analysis fundamental approach starts with understanding a company’s financial statements. There are three key reports:

1. Income Statement

Shows revenue, expenses, and net profit over a period.

• Check for consistent revenue and profit growth.
  
  

2. Balance Sheet

Shows a snapshot of assets, liabilities, and shareholder equity.

• Evaluate debt levels and financial stability.
  
  

3. Cash Flow Statement

Details cash inflows and outflows from operations, investments, and financing activities.

• Positive operating cash flow indicates healthy business operations.
  
  

Step-by-Step Stock Analysis Using Dhanarthi

Step 1: Search the Company

Start your fundamental stock analysis by searching for any NSE/BSE-listed company on Dhanarthi. It offers real-time data instantly.

Step 2: Analyze Revenue and Profit Growth

Check revenue and net profit trends for the past 3–5 years. A strong growth pattern is a key indicator of a robust business model and sound fundamentals of stock analysis.

Step 3: Evaluate Key Financial Ratios

Ratios simplify stock analysis fundamental evaluations:

• P/E Ratio: Valuation indicator — shows if the stock is overpriced or undervalued.
  
  

• ROE and ROCE: Measure how efficiently the company uses equity and capital.
  
  

• Debt-to-Equity: Evaluate financial risk.
  
  

• EPS: Higher earnings per share reflect strong profitability.
  
  

Dhanarthi automatically provides these ratios, saving time and making analysis simpler.

Step 4: Examine Balance Sheet Strength

Check total assets, liabilities, and shareholder equity. A strong balance sheet suggests solid fundamental analysis of stocks, supporting long-term performance.

Step 5: Review Cash Flow Health

Positive and stable operating cash flow indicates a company’s earnings are backed by actual cash generation — a vital part of fundamental stock analysis.

Step 6: Use Peer Comparison

Dhanarthi allows you to compare the company’s performance against peers. Compare revenue trends, profit margins, and financial ratios to validate your stock analysis.

Example: Analyzing an IT Company

Suppose you analyze TCS on Dhanarthi. You’ll find:

• Consistent revenue and profit growth over several years.
  
  

• High ROE and ROCE indicating operational efficiency.
  
  

• Strong balance sheet with low debt levels.
  
  

• Positive cash flow supporting dividend payouts and reinvestments.
  
  

By comparing with Infosys and Wipro, you can assess TCS’s position in the market and decide if it fits your investment strategy.

Who Should Learn the Fundamentals of Stock Analysis?

Learning fundamentals of stock analysis is valuable for:

• Beginners who want to learn to evaluate companies confidently
  
  

• Long-term investors building sustainable portfolios
  
  

• Traders making short-term yet data-backed decisions
  
  

• Anyone who wants to avoid risky or speculative picks
  
  

Why Use Dhanarthi for Fundamental Analysis of Stocks?

Dhanarthi offers several advantages:

• Real-time, up-to-date data on NSE/BSE companies
  
  

• Automatic calculation of key financial ratios
  
  

• Summarized financial statements for quick insights
  
  

• Peer comparison to validate your stock analysis fundamental conclusions
  
  

• 100% free, no login or subscription required
  
  

Final Thoughts

Mastering fundamental stock analysis and the fundamentals of stock analysis empowers you to make smarter, more confident investment decisions. By focusing on a company’s actual financial performance rather than hype, you can build a stronger, more resilient portfolio.

Thanks to Dhanarthi, doing thorough stock analysis is now easier and accessible to everyone — without spending on expensive tools or subscriptions.

FAQs

What is fundamental stock analysis?

It involves evaluating a company’s financial and operational data to understand its real value and long-term growth potential.

Is Dhanarthi free?

Yes, it is completely free with no hidden fees or login requirements.

Do I need finance knowledge to start?

No. Dhanarthi is designed for all investors, including beginners.

Can I compare companies on Dhanarthi?

Yes, you can easily compare different companies across sectors and analyze their fundamentals.