Trend analysis would review historic sales, profits and debt levels. Trend analysis would also review valuation ratios such as the price earnings ratio (P/E), price to book value, book value per share, and price to sales.

Other corporate factors that is valuable when analysing company performance include the product line, product quality, human resource needs, training, and the technological state of machinery or equipment.

The valuation tools used most frequently by investors and analysts include:

1. The dividend discount model (DDM). This is a method for calculating the market price of a blue-chip company's common shares. The value of a common stock is the present value of all future dividend payments.

2. The price to earnings (P/E) ratio is calculated as the price of the common share divided by earnings per common share. A company with higher quality earnings should have a higher P/E ratio than a company with low quality earnings. A growth company will have a higher P/E ratio than a stable company. The P/E ratio for a company should be compared to other companies in the same industry. It is important to note that the P/E ratio is the inverse of market interest rates and when consumer confidence is high, P/E ratios will tend to be high.

3. Growth is not always a blessing. Without careful financial planning, growth can cause cash flow problems. A company's sustainable growth rate is the maximum rate at which it can grow without straining its financial resources. The long-term sustainable growth rate (g) is calculated as the product of the return on equity (ROE) and the company's earnings retention rate (RR). If the actual growth rate exceeds the sustainable growth rate, the company must eventually raise additional capital. To raise capital internally, a company can sell equity, increase financial leverage by issuing bonds, reduce dividends, sell marginal operations, outsource production or administration, or increase prices. Externally, a company can seek a merger partner or acquirer.