Quantitative Analysis Vs Qualitative Analysis –
Quantitative Analysis Vs Qualitative Analysis, Fundamental Analysis includes Economy, Industry, and Company Analysis. Fundamental analysis of a company can be divided into two types; Quantitative and Qualitative. Quantitative analysis involves looking at the hard data, and the actual numbers. Qualitative analysis is less tangible. It concerns subjective characteristics and opinions – things that cannot be expressed as a number. Quantitative data refers to any information that can be quantified, counted, or measured, and given a numerical value. Qualitative data is descriptive, expressed in language rather than numerical values.
Quantitative research is based on numeric data. Qualitative research focuses on the qualities of users—the ‘why’ behind the numbers. Quantitative research uses logical or statistical observations to conclude and qualitative research relies on a verbal narrative like spoken or written data.
Quantitative Analysis –
This is an analysis that is purely number-based and considers the company’s financial statements and concludes the share price from the observations. It is the process of collecting and evaluating measurable and verifiable data to understand the behavior and performance of a business. It is used for the analysis of any behavior or event that is quantifiable. This form of analysis is used for several reasons and in fields, including the evaluation of a financial or investment instrument, a company’s finance, economic value, and other events.
This analysis is used to generate numerical data and hard facts, by employing statistical, logical, and mathematical techniques. It is used to come up with hard data that leads to better decisions. Quantitative analysis means measuring by quantity rather than quality. This analysis uses figures and numbers in the analysis of the performance of a business.
Quantitative Analysis Example –
This analysis includes analysis of financials such as
- Balance Sheet
- Income Statement
- Cash Flow
- Financial Ratios
Qualitative Analysis –
This is an analysis that involves management performance, management decisions, brand value, the financial performance of the company over a given period, and other similar factors. Qualitative analysis is an analysis tool used in businesses to analyze an organization’s overall value. It does not just focus on the management and employees of a company, it also pays attention to the company’s customers.
The advantage of this analysis is that it provides an opportunity with the qualitative factors to discover the potential risks of the company in the future. By using this analysis we get a clearer image of the company. Qualitative analysis means measuring something by its quality rather than quantity. It is often used to analyze an operation or evaluate an investment, business idea, or opportunity. This type of analysis relies on non-quantifiable information which goes beyond information supplied in the balance sheet or annual reports of a company.
Qualitative Analysis Example –
This Analysis includes analysis of
- Understanding the core business of a company
- Management performance
- Management history
- Management decisions
- Company future plan
- Industry cycles
- Labor relations
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