Before buying a stock or an option, most traders will make at least a quick fundamental analysis of the company in question. It's a way to peek inside the company and see what makes it tick. After all, things may look good on the surface, but be rotten at the core. Do you really want to buy a stock that has a lot of problems sitting below the surface.

There is a strong section on fundamental analysis on The Dedicated Trader, a tool created to inform and educate students about the process of buying and selling stocks and options. The fundamental analysis portion of the Education Center has three tutorials: Introduction to Qualitative and Quantitative Analysis, Crunching the Numbers, and Financial Ratios Explained.

Qualitative analysis focuses on the general qualities of a company to consider when picking a stock, the management of that stock, the competition the stock faces within the industry, and the brand recognition. Quantitative analysis looks at a company's annual report, the balance sheet, the income statement, the cash flow statement, and financial ratio.

Crunching the Numbers is a tutorial that walks a learner through the steps to make a decision about the soundness of a company's management and products. This allows the focus to be placed on items like net income and quarterly sales.

Financial Ratios Explained is a succinct explanation of 19 basic ratios used in fundamental analysis. Each of these ratios covers an important aspect of analyzing a company's business. This reveals information about performance ratios (average interest ratio, book value per share, cash flow to assets, common size analysis, dividend payout ratio, earnings per share, gross profit margin, price/earnings ratio, profit margin, return on assets, return on equity), activity ratios (asset turnover ratio, collection ratio, inventory turnover), financing ratios (debt-to-assets, debt-to-equity), and liquidity ratios (acid test, interest coverage, working capital).

This is a gold mine for any student who seeks a better understanding of fundamental analysis. It's a good way to become aware of that form of analysis while improving your stock market education.