Which type of analysis focuses on a company's financial statements and performance metrics?

Fundamental analysis is a method used to evaluate a company's financial health and performance by examining its financial statements and key performance indicators. This approach involves analyzing various components, such as income statements, balance sheets, and cash flow statements, to assess the company's profitability, financial stability, and growth potential.

Investors who use fundamental analysis look for intrinsic value, aiming to determine whether a stock is undervalued or overvalued based on the company's financial metrics and economic factors. They may consider ratios such as price-to-earnings (P/E), return on equity (ROE), and debt-to-equity to draw conclusions about a company's performance and outlook.

In contrast, technical analysis focuses on price movements and trading volumes rather than financial statements. Market sentiment analysis looks at overall investor attitudes and market conditions, while quantitative analysis utilizes mathematical models and statistical techniques to analyze financial data. Fundamental analysis is distinct in its emphasis on direct financial metrics and company fundamentals, which is why it is the correct answer.