Wealth Building

Everyone know business analysis is very important to make big companies. We all want to find companies that find wonderful businesses are very potential for long-term growth. Before committing your hard earned money in a single transaction you will feel better, after having conducted a kind of depth, the best-of-breed business analysis.

This analysis must take into account:

1. The fundamentals of the business over a period of 5 to 10 years. Basic principles of sales growth, income, and equity in respect of current expenditure and liabilities. Ideally we are looking for companies with extensive experience in equity steadily increasing year after year.

2. Nature and extent of competitive advantage or that Moat has created a business that differentiates itself from the competition. Companies can benefit from the economic moats, such as trademarks, patents, switching costs or low costs.

3. Stress management and compensation. We are looking for CEO who are passionate about their work and the importance they attach to the creation of a genuine long-term sustainable value for its shareholders. Look at the management teams that are fairly compensated for their efforts rather than the few people who rip off unsuspecting shareholders with bonus scandal.

4. The intrinsic value of the company compared to what Mr. Mercado (market) prices can be at any given time. As the value and price are not always the same, allowing the patient investors great opportunities to buy shares at a price and then sell at a premium.

After conducting business fundamentals, competitive advantage, management team and an end in itself, you can use the same approach that the main competitors of the company to find out who's the best of its kind in this area. By identifying and investing in only the first of those best-of-breed companies in various sectors of the stock market when they go on sale at an affordable price, you can increase the likelihood that you can build a portfolio of successful investments.

The first step in this process is designed to search for potential companies to analyze. Here are the first four sources, which can be a great success thanks to:

1. Find your passion, skills and interests of the companies that you know.

Where are companies spending money? What hobbies do you pursue, that would give a better understanding of a particular company or industry? Try to find as many documents as possible for these companies, we can understand better than others. Your task is to brainstorm a list of these potential industries and individual companies that enjoy the search.

2. Check Yahoo Finance or MSN Money on the Internet.

Using the search capabilities of each page you will find the potential industries that might be of interest and then navigate to find a list of companies that have meaning for you. You can also use the screening function is the website to find companies with the highest ratios for:

• Return on Equity

• Price Value

• the price to free cash flow.

Please note that retain appears at the top of the lists and what you know.

3. See the CNBC financial news channels as you like or national economic news.

Sometimes you can get great leads firms to consider in their initial investigation by selective TV viewing. List the names of companies with strong potential to change your interest.

4. Books, magazines and newspapers are also a great source of high potential companies to explore.

Once you have identified several potential companies that have meaning for you, your second step is to determine whether the company is the best of breed in their industry. We analyze the fundamentals of the company.

Reference : Randall Stewart