Selection Criteria Checklist (Financial Perspective)

GROWTH

  • Sales Revenue YOY Growth > 10%
  • Net Profit Margin YOY Growth > 10%
  • Cash Flow > 10%
  • Operating Cash Flow is growing YOY

FINANCIAL HEALTH

  • Net Profit Margin > 10%
  • Low debts or Net cash
  • Long Term Debt < 3 x Net Profit
  • Current Ratio > 1

OPERATING EFFICIENCY

  • ROA > 10%
  • ROE > 15%

# YOY = Year Over Year
# The company has to meet the criteria consistently YOY
# Please check the link on the right under Education & Tools for financial ratio explanation & definition

This Post Has 2 Comments

  1. Ray168 November 9, 2012

    Hi,
    Do you consider to include Price / NTA under the Financial Health.

  2. Marubozu November 9, 2012

    I don’t really look for Price / NTA because this ratio does not reflect the strength of the company and the sustainability of the business.

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