Tuesday, September 18, 2007

"Who Ever Loved, that Loved not at First Sight?"

“Who Ever Loved, that Loved not at First sight?”
Ah, love at first sight! Most of us mortals would like to fall in love, if possible the one at-first -sight variety. If love is not love-at-first-sight, is it still love? May be not quite. Therefore, we say, “Whoever loved, that loved not at first sight is a bogus love.” True, I have twisted the Christopher Marlowe original from “Hero and Leander” into something almost vulgar. I did not mean to be crude and offensive. But I am. So let me try rephrasing it. Here it goes, “Whoever loved, that loved not at first sight is a love after due diligence.” Hope it sounds more acceptable. Gurus of all stripes warn that we perform due diligence before we sign on anything resembling a piece of paper with fine prints on, particularly those that are likely to produce big waves on the Richter scale of finance.
Looking at company ratios goes towards fulfilling that duty. Ratios represent signs and symptoms of company health. There are four types of ratios. They cover most aspects of company affairs. They are: liquidity ratios, risk analysis ratios, operating performance ratios and value ratios. It is worthwhile spending some time on these small calculations. Because, it is like signing a prenup.

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