Is the company in an industry of good economics, i.e., not an industry competing on price points. Does the company have a consumer monopoly or brand name that commands loyalty? Can any company with an abundance of resources compete successfully with the company?
Are the earnings on an upward trend with good and consistent margins?
Is the debt-to-equity ratio low or is the earnings-to-debt ratio high, i.e. can the company repay debt in few years from its earnings?
Is ROE consistent over its history and high compared to the industry average? Is it more than 12%? Or does the company have high and consistent Return on Total Capital?
Does the company retain earnings for growth?
The business should not have high maintenance cost of operations, low capital expenditure or investment cash outflow. This is not the same as investing to expand capacity.
Does the company re-invest earnings in good business opportunities? Does the Management have a good track record of profiting on these investments?
Is the company free to adjust prices for inflation?
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