Look for companies with a history of generating free cash flow from "summary" of The Little Book That Builds Wealth by Pat Dorsey
When analyzing a potential investment, one key factor to consider is whether the company has a history of generating free cash flow. Free cash flow is the cash that a company generates after accounting for all of its expenses and investments in capital expenditures. This is important because it represents the true cash flow that a company can use to reinvest in its business, pay down debt, or return to shareholders. Companies that consistently generate free cash flow are generally more stable and have a better chance of weathering economic downturns. This is because they have a cushion of cash that can be used to fund operations and keep the business running smoothly. On the other hand, companies that struggle to generate free cash flow may be at risk of running into financial trouble if they are unable to cover their expenses. By focusing on companie...
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