Saturday, August 6, 2011

Business Cycles - Companies' Reactions

Some questions to think on for a layman handling a business
  1. How much of a debt is good till it becomes bad hurting returns on investments
  2. What earnings come from real business, what come due to SPV, interest rate risks and other investments - not being part of core business areas
  3. What is the optimum proportion of cash flow - Outflows as a percentage of annual profits. Should they come down before you hit the bottom or prior to that
  4. Are earnings real in cash
  5. What is the operating cashflow compared to profits - does it smack of a fraud....

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