Investing Questions
Does this business interest you?
What is the company's mission?
Is the business understandable?
Can you describe how the business works?\ess make money?
How has the business changed over time?
When was the company founded?
When did the company come publish?
Is the product or service an easy or hard sell?
Are customer dependent on this busi
Do customers pay with credit or cash?
Do customers give the company po:mouth?
Whats the net promoter score?
If the business disappeared, would customers notice or care?
Do customers buy ina recession?
Can customers delay their purchase?
Can customers demand discounts?
What financial metrics matter most?
What are the business fundamentals?
Is revenue recurring?
Is revenue cyclical, countercyclical, or recession resistant?
Does the company have a fixed-cost or variable- cost business model?
Are accounting standards conservative or iberal?
Does the company emphasize GAAP or Non-GAP accounting?
Are the financial statement easy to understand?
How much cash does the company have?
Are there accounts receivables? How much?
Is there inventory? How much?
Is there any goodwill? How much?
What are the company biggest assets?
Does the company have debt? How much? What ind?
Does the company have deferred revenue?
What are the company biggest liabilities?
How has the company been funded? .
Is there any preferred stock?
Are retained earnings positive and growing? *
Is there any treasury stock?
Does revenue consistently grow?
What is the gross margin?
Isthe gross margin stable? Expant
Contracting? Why?
Are there research & development expenses?
Are there selling & marketing expenses?
What are the company's biggest operating expenses?
What is the company's operating margin?
Does the company have any non-operating expenses?
What is the company's net profit margin?
Is the company profitable on a Non-GAAP basis?
Is the company profitable on a GAAP basis?
What is the return on equity? Is it consistent?
What is the return on asset? Is it consistent?
What is the return on invested capital employed?
Does the business have opportun capital at high rates of return?
How does changes in working capi flow?
Are capital-expenditures high or low? :
Does the company generate positive free cash flow? .
Does the company have high depre expense?
Donet income and free cash flow closely match =each other? If not, why?
What are the biggest non-cash charges? .
What is the company doing with it's operating income? .
Does the company sell a diversified or concentrated group of products?
What are the company's most important
proudcts and or services?
Are the products/services a vitamin (nice to
have) or a painkiller (must have)? What pain is alleviated for the customer?
Isthe product a commodity or at risk or commoditization?
Are sales cyclical, countercyclical, or recession.
Does the company produce goods or services
whose sales are likely to increase substantially for at least the next several years?
Isthere a sustainable competitive advantage?
What is the moat source?
Are there network effects or a product ecosystem?
Do customers have switching costs? How painful would it be to switch?
Isthere a cost advantage? What's the source or
the cost advantage? Does the company havea strong brand?
Are customers willing to pay more because of
‘the company's brand?
Are there other intangibles? Patents? Copyright?
Trademark? License?
Isthe moat shrinking, stable, or expanding?
Does the company have favorable growth prospects?
Whats the motivation to grow?
What is the total addressable market size? |growing?
Does the company have a history of successfully launching new products/services that generate needle-moving growth?
Operating leverage: Is it ahead of or behind the company?
Isthe company a ‘top dog and first mover’ in an portant industry?
Has historical growth been profitable? Can it continue?
Growing too quickly or at a steady pace?
Is the company growing organically or though acquisition?
How does management make M&A decisions?
Have past acquisitions been successful?
Has management ever been forced to take a goodwill write-down?
Does the company consider returns on investment a company's research and development spending?
Does the company have an above-average sales organisation?
Will the company's growth require so much equity finance that the much larger number of shares outstanding will largely cancel the benefit from this. what type of manager is the CEO?
anticipated growth? How did CEO rise to lead the business?
Isthere any customer concentration?
How much stock do insiders hold?
Isthe business completely customer- and product- .
How are senior managers compensated? .
How did they gain their ownership interest?
Can the company raise prices at will?Is the company ‘Have the managers been buying or sellingthe a price taker or price-maker? stock?
Customer retention rate? Churn?
Isthe founder still involved?
Is the product or service an easy or hard sell?
Investing Questions
What are the key risks?
How does inflation affect the busines:
Concentration risks: Customer? Supp!
How long has the CEO been with the business?
How much industry experience do the top 3 managers have?
Does the CEO love money or love the business?
Does the company have a mission statement?
Is the CEO overly promotional?
Would you trust the CEO to aby your kids?
Is the CEO a good communicator?
Is the CEO an independent thinker?
Are de ized or decentralized?
Does CEO considers all stakeholders with decisions?
How involved is the CEO in day-to-day ns?
Is the CEO involved with product decisions?
Does the CEO value employees?
Does the CEO get good ratings on Glassdoor + Indeed?
Would you want to work at this company?
Would you want to report to this CEO?
Does the CEO surround him or herself with talented people?
How does management team allocate capital?
Does the management team have a short- or a long-range outlook?
Marketing? Key Employee?
Is there a potential for disruption or obsolescence?
Do outside forces matter? Commodity prices?
Interest rates? Stock price? Strong Economy?
Is stock-based compensation excessive?
Are the financial statement easy to understand?
Does the business have poor earnings qu Is there regulatory risk?
Is there currency risk?
Is it easy or hard for new companies to join the industry?
Does management issue guidance?
Does management conrency exceed Wall
Street's targets?
Does management under promise + over deliver?
Isthere a history of ied capital-allocation de ns?
Does management buy back stock? How much?
Have buyback reduced the share count? How much?
Does the company pay a dividend? How long?
Has it grown?
Has the stock outperformed the market since IPO?
Has the stock outperformed the market over the last 5 years?
Has the stock outperformed it's sector?
What stage of business maturity is the company currently in?
What is the market capitalization & enterprise value?
What metrics are most useful to determine the company's valuation?
Sales? Gross profit? EBITDA? EBIT? EBT? Net income? Free cash flow?
Could the company re market capitalization?
What expectations are baked into the current market valuation?
What growth assumptions are needed to make a discounted cash flow analysis work?
Does a reverse discounted cash flow analysis make sense?
Does this business interest you?
What is the company's mission?
Is the business understandable?
Can you describe how the business works?\ess make money?
How has the business changed over time?
When was the company founded?
When did the company come publish?
Is the product or service an easy or hard sell?
Are customer dependent on this busi
Do customers pay with credit or cash?
Do customers give the company po:mouth?
Whats the net promoter score?
Ifthe business disappeared, would customers notice or care?
Do customers buy ina recession?
Can customers delay their purchase?
Can customers demand discounts?
What financial metrics matter most?
What are the business fundamentals?
Is revenue recurring?
Is revenue cyclical, countercyclical, or recession resistant?
Does the company have a fixed-cost or variable- cost business model?
Are accounting standards conservative or iberal?
Does the company emphasize GAAP or Non-GAP accounting?
Are the financial statement easy to understand?
How much cash does the company have?
Are there accounts receivables? How much?
Is there inventory? How much?
Is there any goodwill? How much?
What are the company biggest assets?
Does the company have debt? How much? What ind?
Does the company have deferred revenue?
What are the company biggest liabilities?
How has the company been funded? .
Is there any preferred stock?
Are retained earnings positive and growing? *
Is there any treasury stock?
Does revenue consistently grow?
What is the gross margin?
Isthe gross margin stable? Expant
Contracting? Why?
Are there research & development expenses?
Are there selling & marketing expenses?
What are the company's biggest operating expenses?
What is the company's operating margin?
Does the company have any non-operating expenses?
What is the company's net profit margin?
Is the company profitable on a Non-GAAP basis?
Is the company profitable on a GAAP basis?
What is the return on equity? Is it consistent?
What is the return on asset? Is it consistent?
What is the return on invested capital employed?
Does the business have opportun capital at high rates of return?
How does changes in working capi flow?
Are capital-expenditures high or low? :
Does the company generate positive free cash flow? .
Does the company have high depre expense?
Donet income and free cash flow closely match =each other? If not, why?
What are the biggest non-cash charges? .
What is the company doing with it's operating income? .
Does the company sell a diversified or concentrated group of products?
What are the company's most important proudcts and or services?
Are the products/services a vitamin (nice to have) or a painkiller (must have)?
What pain is alleviated for the customer?
Isthe product a commodity or at risk or commoditization?
Are sales cyclical, countercyclical, or recession.
Does the company produce goods or services
whose sales are likely to increase substantially for at least the next several years?
Isthere a sustainable competitive advantage?
What is the moat source?
Are there network effects or a product ecosystem?
Do customers have switching costs? How painful would it be to switch?
Isthere a cost advantage? What's the source or
the cost advantage? Does the company havea strong brand?
Are customers willing to pay more because of
‘the company's brand?
Are there other intangibles? Patents? Copyright?
Trademark? License?
Isthe moat shrinking, stable, or expanding?
Does the company have favorable growth prospects?
Whats the motivation to grow?
What is the total addressable market size? |growing?
Does the company have a history of successfully launching new products/services that generate needle-moving growth?
Operating leverage: Is it ahead of or behind the company?
Isthe company a ‘top dog and first mover’ in an portant industry?
Has historical growth been profitable? Can it continue?
Growing too quickly or at a steady pace?
Is the company growing organically or though acquisition?
How does management make M&A decisions?
Have past acquisitions been successful?
Has management ever been forced to take a goodwill write-down?
Does the company consider returns on investment a company's research and development spending?
Does the company have an above-average sales organisation?
Will the company's growth require so much equity finance that the much larger number of shares outstanding will largely cancel the benefit from this. what type of manager is the CEO?Anticipated growth?
How did CEO rise to lead the business?
Isthere any customer concentration?
How much stock do insiders hold?
Isthe business completely customer- and product- .
How are senior managers compensated? .
How did they gain their ownership interest?
Can the company raise prices at will?Is the company ‘Have the managers been buying or sellingthe a price taker or price-maker? stock?
Customer retention rate? Churn? © Isthe founder still involved? .
Is the product or service an easy or hard sell?
Investing Questions
What are the key risks?
How does inflation affect the busines:
Concentration risks: Customer? Supp!
How long has the CEO been with the business?
How much industry experience do the top 3 managers have?
Does the CEO love money or love the business?
Does the company have a mission statement?
Is the CEO overly promotional?
Would you trust the CEO to aby your kids?
Is the CEO a good communicator?
Is the CEO an independent thinker?
Are de ized or decentralized?
Does CEO considers all stakeholders with decisions?
How involved is the CEO in day-to-day ns?
Is the CEO involved with product decisions?
Does the CEO value employees?
Does the CEO get good ratings on Glassdoor + Indeed?
Would you want to work at this company?
Would you want to report to this CEO?
Does the CEO surround him or herself with talented people?
How does management team allocate capital?
Does the management team have a short- or a long-range outlook?
Marketing? Key Employee?
Is there a potential for disruption or obsolescence?
Do outside forces matter? Commodity prices?
Interest rates? Stock price? Strong Economy?
Is stock-based compensation excessive?
Are the financial statement easy to understand?
Does the business have poor earnings qu Is there regulatory risk?
Is there currency risk?
Is it easy or hard for new companies to join the industry?
Does management issue guidance?
Does management conrency exceed Wall
Street's targets?
Does management under promise + over deliver?
Isthere a history of ied capital-allocation de ns?
Does management buy back stock? How much?
Have buyback reduced the share count? How much?
Does the company pay a dividend? How long?
Has it grown?
Has the stock outperformed the market since IPO?
Has the stock outperformed the market over the last 5 years?
Has the stock outperformed it's sector?
What stage of business maturity is the company currently in?
What is the market capitalization & enterprise value?
What metrics are most useful to determine the company's valuation?
Sales? Gross profit? EBITDA? EBIT? EBT? Net income? Free cash flow?
Could the company re market capitalization?
What expectations are baked into the current market valuation?
What growth assumptions are needed to make a discounted cash flow analysis work?
Does a reverse discounted cash flow analysis make sense?