From today's Eureka Report ' 'Eight Ways to Spot a Rotten Stock'.
I have not repeated verbatime - just the eight 'danger will robertson' signs that you are holding a whiffy number in your portfolio.
1. Negative cashflows. Fairly self-evident; however best not to apply to a mining explorer, bio tech start-up etc. Cashflows are reported quarterly on the ASX so there really are no excuses.
2. Cap net debt to equity ratios at 50%. If you have more debt than shareholder assets (as measured by the balance sheet) then you have bodgy assets or are making losses or both. Insolvency or a cap raising at the very least is the result.
3. Check you Interest Coverage Ratio and make sure it does not go under 1.0x. Fairly self explanatory. If you can't meet your interest bill, your bank will be unhappy and call in the hatchet men.
LOL; have to go to lunch. Will be back with the other five (and some more) in the arvo.