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Fundamental analysis makes use of real, public data such as revenues, earnings, return on equity, profit margins etc. for evaluating underlying value of stocks and equity instruments of a company and make an estimate of its potential for future growth. In this technique, the researchers usually adopt a holistic approach to study a business in order to analyse the contemporary and prospective health of a company. At times, they try to work out the intrinsic value of a stock in order to know what may be its real worth. They often use quantitative techniques such as discounted cash flow (DCF) analysis in order to value a project, company or asset at present, based on how much money it’s projected to make in the future. However, such projections are often based on certain assumptions which may or may not come true as expected. For instance, the discounted cash flow theory assumes that people are rational and so nobody would buy a business for more than its future discounted cash flows, but this assumption may not always be correct as some people may get carried away by emotions or extremes of negative or positive feelings while making trading decisions. Fundamental Analysis is more effective in fulfilling long term growth objective of shares, rather then their short-term price fluctuations.