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Business Analysis

One of the main tasks maintained by investors and market analysts.

Business analysis is used to identify points of strength and weakness in investment positions and treat weaknesses.

Business analysis is concerned with assessing stocks and bonds, and evaluating institutions.

Business analysis consists of two parts:

  1.  Fundamental analysis
  2.  Technical analysis

Fundamental and technical analyses are some of the necessary tools business managers use to make business decisions.

Objectives of Business Analysis:

  •  Identifying Investment Properties

Business analysts must be aware of the investment risks and returns, which represent objectivity of investments.

  •  Identifying investments:

Learning about the more profitable and less risky investments such as: bonds, stocks, and foreign currency, as well as the fundamental analyses of these investments.

  •  Understanding the Market:

One of the tasks of a business analyst is knowing about the best investment alternatives and giving advice regarding risk.

Difficulties of Business Analysis

Business analysts find difficulties while analyzing a stock or product, such difficulties include:

  •  Personal perspective

One of the main difficulties facing financial analysts and their own ability to analyze, deduce, interpret, and study changes in world economy.

  •  Lack of financial data

Several developing markets suffer from lack of fundamental and statistical data, as well as irregularity of data disclosure, which limit analysts’ abilities to make the right decisions.

  • Predicting financial numbers:

One of the most important tools for successful business analysts is future economic prospects, which is built on past financial numbers, like interest prospects, inflation, and growth.

Fundamental Analysis:

Predicting general economic conditions, and analyzing corporate financial reports.

Steps:

  1. Establishing the objective behind the analysis. The fundamental analysis paints a picture of the investment decisions recommended by investment analysts to investors and determines positive and negative investment decisions based on available financial data.
  2. Gathering dependable statistical and economic data from official government bodies and research institutions.
  3.  Studying data and connect them to technical analyses to make the right investment decisions.

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