| AbstractIn securities analysis, how to assess the stock values accurately is one of the most challenging problems. This thesis is based on the study of many security investment theories of both domestic and western countries. Added with my own experience of security investment these two years, I adopt the basic scale analysis method. From the perspective of qualitative and strategic investment, further research on internal investment value and evaluation method of stocks are carried on. This thesis is made up of seven chapters, which can be divided into three parts. Chapter 1 and 2 are the first part. It is presented from stock investment to internal value analysis of stocks, then to discounted cash flow method, and finally the basic scale analysis of stocks. Meanwhile, it generally introduces the value and objectives of the business, several commonly used evaluation methods of stock value, the system of basic scale analysis method and how to choose an appropriate process when evaluating a stock, and the similarities and differences between basic scale analysis and technical analysis. The conclusions of this part are: 1. Stock investment should be a rational decision based on the internal value of stocks. 2. Among the current evaluation methods, discounted cash flow method can best show the internal value of a stock, because it requires complete information about a company. It aims long-term development as well as short-term existence, and reveals to us that the internal value is not only an abstract value decided by operation conditions, but also influenced by several other factors such as expected yield after market risk adjustment and cost of capital. 3. In practice, the basic scale analysis is the very representation of discounted cash flow method. Besides, choosing an appropriate process when evaluating a stock-panoramic analysis and cull-through analysis-is a practice of the basic scale analysis method. It proves effectiveness and efficiency. The second part is made up of chapter 3,4,5,6. This part is the core of the thesis because it demonstrates the guiding function and significance of the basic scale analysis method to stock investment. From integrated analysis of three levels-macro-environment, industry conditions and the company itself, we can find the relevant determinants of stock value and supply-demand relationship, so as to discover the internal investment value of stocks. Stock prices are decided by its internal value basis and external supply-demand relationship. The basic scale analysis method is to analyze the supply-demand conditions of stocks, evaluate the cost of capital in security market, and determine the current prices and future tendency from three aspects (mainly from economic perspective). That is, macro-policies, economy and popular psychology. According to the company's plan, it is also used to judge the possible fluctuation areas of stock prices in the future. From micro-level, basic scale analysis makes use of the financial and non-financial information to estimate and evaluate company's future, analyze the internal value of stock itself, then finally manage the risk of investment and decide whether to invest on it or not. Chapter 3 is macro analysis about the economic factors. From fundamental function of economic growth, currency and interest rate policies, economic growth cycles, international financial market and exchange rates, it analyzes and testifies the current prices and future tendency of market index of stock prices.Chapter 5 is micro analysis about a company's current operation (non-financial information), previous sales achievements (financial information) and future profile (mainly are financial forecast). The current operation analysis includes operation strategy analysis, product and market analysis, culture and managerial qualities analysis. Previous sales achievements analysis is made up of accounting analysis, financial analysis and cash flow analysis. In the session of future profile, it only introduces some financial forecast met...
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