Before buying stock in a company, you want to make sure it has the financial strength to stay in business for the long-term. A company that can turn a profit, has the cash to pay for its operations and isn't deeply in debt is usually a better investment than a company that's struggling.
To understand a company's financial health, you can start with three measures: profitability, liquidity and solvency.
Trading Up-Close: Measures of Financial Strength
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