Fundamentals include the basic qualitative and quantitative information that contributes to the financial or economic well-being of a company, security, or currency. The most important fundamentals are those that drive a company's revenue and profit. For example, companies with strong brands and high customer loyalty tend to have pricing power which allows them to charge more for their products than their competitors. Other important fundamentals include a company's cost structure, capital structure, and operating efficiency.The financial health of a company is also determined by its balance sheet ratios such as debt-to-equity ratio and interest coverage ratio. These ratios indicate how much debt the company has compared to its equity and how easily it can repay its debts if they come due. A healthy company will have low levels of debt and high interest coverage ratios.
