Avoid companies with a high level of debt from "summary" of The Little Book That Builds Wealth by Pat Dorsey
When evaluating a potential investment, it is crucial to pay attention to the level of debt a company carries on its balance sheet. Companies with high levels of debt are often riskier investments because they may struggle to meet their debt obligations in times of economic downturn or if their business faces challenges. High debt levels can limit a company's financial flexibility and ability to invest in growth opportunities. In addition, companies with high debt levels may be more vulnerable to changes in interest rates, which can impact their profitability. One way to assess a company's debt level is to look at its debt-to-equity ratio. This ratio compares a company...
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