For a beginner in stock market, it is very important for him to understand how stock market works. There are no set rules which can predict the direction in which the stock market or even one particular stock will go. Therefore, it is critical for an investor to be able to analyze a stock. Most of the times, beginners in stock market are intimidated by terms which are being used by the experts. They are usually not able to understand the difference between different approaches of doing analysis like fundamental analysis, technical analysis and quantitative analysis.

This is the reason why they keep looking out for ways to do stock analysis which are simple and easy to understand. They also don't want to pay anything for such kind of analysis. To be honest, no real information is free and easy but you can still find ways to substitute the paid analysis reports by freebies if you are ready to look for information at multiple places and do some research.

When you start analyzing the stock, you first have to look at the financial position of the company. Usually, the company's annual reports have all these information. In earlier days, these reports were not easy to get but now everything is available on the internet. You can log on to financial websites like Yahoo Finance, Google Finance, Motley Fool site or any other reliable website. You can get company profile, its products and services, financial statements etc free of cost.

Apart from the financial statements, there are other things which should be looked at. Some of these are technical indicators like 50 day moving average. This average usually gives the price trend of the stock. In case the current price is more than 50 day moving average you can consider buying that stock. Other factors you should consider are the cash flow per share, daily average volume, financial health grade and growth grade and price per sales ratio.

In addition to these ratios, you can also look for the recommendations from various experts and analysts. Usually, the analysts do research and then give buy, hold or sell recommendation for a particular stock. The institutional ownership of a stock also gives a fair idea about what bug fund houses think about that company. If they are buying it, there is a good chance that this is a good bet. The growth margin and future competition should also be looked at. As you can see there are many parameters involved here and the stock market checklist is pretty lengthy. The good thing is that most of this information is freely available on the internet.