One Way . . . Not

Fundamental analysis has many valid approaches. Some take a loose look at a few widely-accepted ratios, and some are more systematic and thorough. Every educated investor has special insights and favorite ratios, but basically, anyone who recommends a good look at a company's financial statements before purchasing a stock is recommending fundamental analysis. The important thing is that regardless of the specific approach, knowing the companies behind the stocks is the basis for making good investment choices.