Quick Analysis Using G.E.T.
Gross Profit MarginCompany with a Durable Competitive Advantage: Undiscovered Company:
Equity Bond TheoryEquity Bond Theory for a Taxable Bond: Equity Bond Theory for a Tax-Free Municipal Bond:
Total Long-Term Debt to Income Ratio
Price to Earnings RatioConsider buying the stock when: ![]() Consider selling the stock when: ![]() Price to Book RatioConsider buying the stock when: ![]() The True P/E Ratio of stocks in Berkshire Hathaway's Portfolio: ![]() Analysis of the Income Statement
Business Cost to Gross Profit RatioFor a good company: For a great company:
Research and DevelopmentFor a company with a Durable Competitive Advantage: If the company has Research and Development cost, that is if: Use this ratio as a guide:
Depreciation/Amortization to Gross Profit Ratio
Interest Expense to Operating IncomeFor companies in the consumer products industry: For companies in other industries:
Net Income to Total Revenue RatioFor companies with a Durable Competitive Advantage: For undiscovered or good companies: For companies in the financial industry use a ratio of less than 20% as a guide:
Net Income
Quick Check for Accounting Gimmicks
Analysis of the Balance Sheet
Cash and Short Term InvestmentsCheck if Cash and Short Term Investments are historically consistent with Net Income: and
Total Receivables to Gross ProfitTotal Receivables to Gross Profit must be consistently less than its competitors:
InventoryCheck if Inventory and Net Income are on a historical corresponding rise: and
Property/Plant/EquipmentCheck if Property/Plant/Equipment is greater than Total Debt:
Check if Property/Plant/Equipment is increasing with Net Income: and
Intangibles and Brand NameGive the company's brand name an estimated worth and add it to Intangibles.
Total AssetsCheck if Total Assets is a very large number. More is better.
Long Term InvestmentsGoogle what the company's Long Term Investments are. There might be something very valuable here.
Notes Payable/Short Term DebtCheck if Notes Payable/Short Term Debt is less than Cash & Equivalents and Long Term Debt. and
Current Portion of Long Term Debt/Capital LeasesCheck if Current Port. of LT Debt is much less than Cash & Equivalents: Check the company's financial health: Check if the company will survive a recession: If the company's financial health is not good, meaning the company has more debt due than cash, these are the potential outcomes:
Adjusted Debt to Equity Ratio
Preferred StockCompanies that have a Durable Competitive Advantage usually do not have Preferred Stock.
Retained EarningsCheck if the company has Retained Earnings:
Check if Retained Earnings is growing over the years:
Determine the Retained Earnings growth rate:
During a recession check if the company has enough cash to survive:
Treasury StockCheck for stock buybacks:
Return on Shareholder's EquityCheck if Return on Shareholders' Equity is greater than 20%:
True Return on Shareholder's EquityIf the company has Treasury Stock: Check if True Return on Shareholders' Equity is greater than 20%:
If Shareholder's Equity is NegativeIf Shareholders' Equity is negative check the 10 Year Summary for strong Net Income:
Analysis of the Cash Flow Statement
Capital ExpendituresFor a good company:
For a great company with a Durable Competitive Advantage:
Issuance Retirement of StockAdd all the values for the previous years and see if you get a negative number:
| My Financial Analysis of Stocks
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