Analyzing financial statements and searching for cheap stocks (technically referred to as value stocks) are predominant parts of the job which anyone who is interested in investing in the stock market has to do. This book investigates the efficiency of a fundamental analysis model which is tailored for value stocks in the context of the Japanese stock market – the second largest market in the world. I find that a simple composite score that are calculated based on seven fundamental signals can significantly and robustly enhance the performance of a value investing strategy that concentrates on high book-to-market stocks in Japan. Moreover, it is also documented that although the profit from such a trading strategy appears to be “abnormal” under the capital asset pricing model (CAPM), it is explained by the Fama-French three-factor model which supports a risk-based explanation for this accounting-based value investing strategy. This book could help enhance the efficiency of investment decisions in the Japanese market significantly, and is of particular importance to those who targets buying or holding underpriced stocks.