SIMPLE CHECKLIST BEFORE INVESTING IN STOCK.

Metric/Method	Recommended Threshold	Description
Sales Growth	Consistent growth over 10 years	Look for high and growing sales year after year. A ten-year period of increasing sales is a good sign.
Normalized EBIT Growth	Consistent growth over 10 years	High and growing profits, as measured by normalized EBIT, year after year.
Reported vs. Normalized EBIT	Roughly the same in most of the last 10 years	Ensure that reported EBIT and normalized EBIT are similar to validate profit quality.
EBIT Margin	At least 10% almost every year	A consistent EBIT margin indicates profitability and operational efficiency.
Return on Capital Employed (ROCE)	15% or more	A high ROCE indicates effective use of capital to generate profits.
DuPont Analysis	Analyze components	Understand what drives a company’s ROCE through this detailed analysis.
Free Cash Flow to the Firm (FCFF)	Growing over 10 years	Look for a growing free cash flow to the firm over a decade.
Free Cash Flow for Shareholders (FCF)	Growing over 10 years	Free cash flow for shareholders should also show growth over a ten-year period.
Operating Cash Conversion Ratio	100% or higher	Companies should convert all operating profit into operating cash flow.
Capex Ratio	Less than 30% almost every year	A lower capex ratio indicates efficient capital expenditure relative to sales.
Capex vs. Depreciation	Spending more on capex than depreciation	Indicates that the company is investing adequately in its assets.
Free Cash Flow Return on Capital Invested (CROCI)	Higher than 10% almost every year	A measure of how well a company generates cash flow relative to its capital investments.
Free Cash Flow per Share	Close to earnings per share in most years	Indicates that the company is effectively converting profits into cash.
Free Cash Flow Dividend Cover	Greater than 1 in most years	Ensures that free cash flow can comfortably cover dividends.
Consistent Growth	Prefer consistent growth	Look for more consistent growth in turnover and profit rather than volatile growth.

HELLO FRIENDS, ONE CAN TAKE HELP OF THE ABOVE SIMPLE CHECKLIST BEFORE INVESTING IN ANY STOCK. THEY ARE NOT HOLIGRILL INVESTMENT FORMULA, BUT YES, WE CAN TRY AND MAKE ODDS IN OUR FAVOR.MY ONLY AIM IS TO MAKE PEOPLE INDEPENDENT IN TRADING AND NOT FOLLOW ANY SELF-CLAIMED GURUS OR FOLLOWING FOR SOME TIPS OR ADVISORY. THERE ARE SOME SIMPLE RULES IF ONE FOLLOWS, HE/SHE CAN JUST DO SMALL RESEARCH OR ANALYSIS ON WEEKEND AND JUST FOLLOW A FEW STEPS ABOVE.ONE CAN JUST FILTER THE STOCKS THEY LIKE WITH THE ABOVE MATRIX AND CAN JUST AVOID OVERTRADING AND JUST BUY QUALITY STOCKS. WITH SUCH PRACTICE, ONE CAN HAVE ONLY QUALITY STOCKS, AND THE MARKET IN THE LONGER TERM WILL TAKE CARE OF GOOD STOCKS.

DISCLOSURE: THE ABOVE ARE NOT THE THUMB RULES, ONE CAN TRADE OR MODIFY AS PER THEIR OWN RULES. I HAVE JUST GIVEN OR SHARED JUST A BASE TO START, AT LEAST IF YOU DO THIS MUCH YOU ARE FAR BETTER THAN WHAT YOU WERE DOING PREVIOUSLY. I PERSONALLY WILL NOT BE LIABLE FOR ANY LOSSES, I AM NOT GIVING ANY ADVICE/TIPS/TRADE CALLS, PLEASE TAKE FINANCIAL ADVICE BEFORE INVESTING.