Use the worksheet below to determine if a company has the coveted Durable Competitive Advantage. Calculate the ratios and equations using the values found in the company's financial statements. Read everything and anything about the company. Understand its business and how it makes money. We also prefer to invest in companies that pay dividends.
IntroductionThe Rundown:
Understand the BusinessIs the company very well known or has a recognizable brand name?
What does the company do and how does it make money?
Does the company pay dividends?
Determine if the Company has Good ManagementWho is the CEO and Chairman of the company? Who are its Board Members?
Is the CEO, Chairman, and Board Members smart? Are they dumb? Are they innovative and productive? Or are they old and obsolete?
Google or find YouTube videos of the CEO, Chairman, and Board Members. Do you like their face? Is your gut feeling about them good or bad?
Does the company's management look out for the interest of shareholders? Or are they greedy and they are in it for themselves?
Check Mark the Durable Competitive Advantage Characteristics of the Business
Look for a Durable Competitive Advantage Using the 10 Year Summary
Strength of Durable Competitive AdvantageIf the company's 10 Year Earnings Per Share is rising, it means the company may have a Durable Competitive Advantage. In that case, we should analyze the company's Financial Statements to find out the strength of the company's durability. If the company's earnings is erratic; going through periods of losses or no profitability, then the company most likely does not have what we are looking for. In that case, stop here, there is no point in proceeding.
Value and Growth AnalysisHighlights of my Analysis:
Analysis of Income StatementHighlights of my Analysis:
Analysis of Balance SheetHighlights of my Analysis:
Analysis of Cash Flow StatementHighlights of my Analysis:
| My Financial Analysis of Stocks
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