The exercises presented throughout this book are related to historical financial data and require the reader to have some basic understanding of financial markets and reports.
Fundamental analysis is a set of techniques to evaluate a security—stock, bond, currency, or commodity—that entails attempting to measure its intrinsic value by examination related to both macro and micro, financial and economy reports. Fundamental analysis is usually applied to estimate the optimal price of a stock using a variety of financial ratios.
Numerous financial metrics are used throughout this book. Here are the definitions of the most commonly used metrics [A:16]: