The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

The strategic question in industrial finance, assuming you have something to work with in the way of a going business, is how to optimize its elements. The latitude for opinion, or subjective judgment, here is wide. But I think it would be generally agreed that, in principle, debt enhances the return on the stockholders’ investment, while at the sa

Rather than looking at profit margins—that is, the share of revenues remaining after costs are deducted—he looked at incremental margins, meaning the share of revenue growth that falls to the bottom line as profits. Any amateur could see that the three Chinese portals all had negative margins; put simply, they were losing money. But a pro would kno

Sales ÷ Working Capital. This critical ratio shows the stretch in your working capital. (Working capital is current assets—cash and accounts receivable—minus current liabilities.) Working capital supports sales. With too little working capital, you grow yourself to bankruptcy. Typically, each dollar in working capital supports eight dollars in sale

Anything that compromises or throws uncertainty on whether your business can fulfill its future promises is a bad move. Don’t do it.