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lecorb

09/10/14 2:08 PM

#5 RE: lecorb #4

BDBD:S&P Quality Ranking: NR Standard & Poor's Fair Value Rank : 1--Fair Value Calc: $11.50 (Overvalued) Sep 6,2014
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Key financial variables to consider in assessing the investment merits of an
industrial company are the following:
Sales: What is the trend? Is future sales growth expected to be greater than the
past 5-year and 9-year growth average? Accelerating sales growth ultimately
provides the fuel behind earnings growth.
Net Margin: As a key measure of company profitabilty, a rising net margin
assesses management capability to wring out more net income from incremental
sales.
% LT Debt to Capitalization: A rising percentage implies greater financial risk, all
else being equal. Rising debt leverage without a concomitant rise in Return on
Equity should raise warning signals of potential cash flow problems. Percentages
above 40%-50% should also be considered a warning.
% Return on Equity: A key perfomance measurement of capital efficiency
assesses what investment returns management can earn on a company's
existing capital base. A sustained percentage above 20% is considered above
average.