Focus on companies with strong cash flow from "summary" of One Up On Wall Street by Peter Lynch,John Rothchild
When it comes to investing in stocks, it's important to pay attention to certain key factors that can indicate a company's financial health. One such factor is cash flow. Companies with strong cash flow are better equipped to weather economic downturns and pursue growth opportunities. Cash flow is essentially the money that flows in and out of a company's coffers. It's a critical measure of a company's financial performance because it reflects how much actual cash is coming in from operations, as opposed to just accounting profits.
Investors should focus on companies with strong cash flow for several reasons. First and foremost, strong cash flow is a sign of a healthy and sustainable business. Companies that consistently generate strong cash flow are more likely to have the resources to invest in research and development, expand their operations, and weather any unforeseen challenges.
Moreover, strong cash flow ca...
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