How to use fundamental analysis to pick equities.

Disclaimer : I am not a financial anaylst of any firm. This is just information that was given to me during my MBA class.

Equities management it seen as one of the fastest way to wealth and also the quickest way to poverty. If you pick the right equities, you can watch it grow and be very happy with your new found wealth. Pick the wrong equities and you can watch your money disappear extremely fast. People look at it like a casino because they don’t know how the equities market works. This article will provide a framework to pick an equities for long term growth.

Good Revenue

Has the company made increased their revenue over the past 5 years. Example :

Company XYZ had revenue at year one at $4M ; year two at $4.5M; year three $4.3M ; year four $4.8M ; year five $5M — It doesn’t have to be year on year growth, as long as it has grown from year one to year five, that shows that they are on the right track to being a sustainable business.

Company ABC had revenue at year one at $4M ; year two at $4.2M; year three at $3.8M ; year four at $3.5M and year five at $2M — This is a big alert to stay away from the company. The company needs new senior managers because the existing ones are losing the company revenue or the market has shrunk and is not growing.