money guidance and how to get rich_237

_{Financial statements can help you discern whether a company's management}

_{is on the ball.}

_{Dig out the company's annual report or its latest earnings report and}

_{look at the balance sheet. Is there more long-term debt than cash?}

_{Many companies carry a lot of debt successfully, but you could look}

_{into whether management is borrowing more than it can pay.}

_{Look at the income statement and compare numbers over the past few}

_{years. Have sales and earnings been growing consistently? A smooth}

_{few surprises.}

_{A growing operating margin is another sign of high quality, showing}

_{that the firm is working on wringing more and more profit from}

_{each dollar of sales. In a period of slowing sales growth, savvy managers}

_{can maintain earnings growth momentum by increasing margins.}

_{To boost margins, management has to run its business more efficiently,}

_{decreasing expenses such as the cost of supplies or employee salaries.}

_{One of the best barometers of management excellence is a company's}

_{return on equity (ROE). It measures how well the company is using its}

_{reinvested earnings to generate additional income.}

_{Invest in companies only after you make sure their highly compensated}

_{executives are earning their keep.}