DCAL=Directed Combinatorial Algorithmic Library has been able to investigate using filters to determine if your investment is sound vs. industry averages.
Current Ratio (initial liquidity) = Total Current Assets/ Total Current Liabilities
Industry Average Ratios: Agriculture 1.31 Mining 1.19 Construction 1.44 Manufacturing Leather/Textile/App 1.50 Chem. Petrol. Metal 1.54 Wood Related Prod 1.43 Mach-trans equipment 1.54 Trans-Communic 1.03 Wholesale Non-Durable 1.53 Durable 1.42 Retail Hardware 1.68 Gen. Merchandise 2.14 Automobiles 1.23 Apparel 1.90 Furniture 1.61 Restaurants 0.73 Financial Services 1.18 Business Services 1.36 Service Industry 1.29
Additional crucial questions that enter into DCAL: Earnings before interest & taxes (EBIT) Working capital Retained Earnings
There are also methologies employed to measure the management and if they value shareholder return or their own positions. -This is crucial to consider.
Remember that giving out $$ is easy but making $$ as a viable business requires accuracy and precision to match demand with supply of the right customers. And if your retained earnings require too much capital expenditures -this is not a positive.
