Business Analysis

Strategy Analysis
Competitive Edge
1) Cost leadership
2) Product differentiation

Durability
1) Rivalry among exisiting firms
2) Threat of new entrants
3) Threat of substitute products
4) Bargaining power of buyers
5) Bargaining power of suppliers

Fundamental Analysis
Financial Ratios:
1) Earnings per shares:
2) Price to earnings ratio: Current, History and Forward. Industry

Tests of a Company's Financial Strength and Liquidity:
1) Working Capital:
2) Current Ratio:
3) Quick/Acid Test/Current Ratio:
4) Debt to Equity Ratio:

Tests of a Company's Efficiency:
1) Gross Margin
2) Net Profit Margin
3) Operating Margin
4) Return on Equity (ROE)
5) Asset Turnover:
6) Return on Assets:
7) Capital per Dollar of Sales

1) Receivable Turnover
2) Average Age of Receivables
3) Inventory Turnover
4) Number of Days for Inventory to Turn

1) R&D to Sales:
2) Interest coverage ratio:

Technical Analyse
1) Double Doji

Double Doji - This candle (two adjacent doji candles) implies that a forceful move will follow a breakout from the current indecision.



http://offers.quote.com/fbp/2004/040904.htm

Strategy
1) Don't bother with big namesChinese large caps look pretty efficiently priced. For example, $260 billion PetroChina is widely covered by analysts and trades for 14 times earnings, while $227 billion China Mobile -- another China bellwether -- trades for 26 times earnings.
While both are expected to grow modestly faster than their multinational counterparts, that growth is fairly predictable for such mature companies, and it seems to be priced into the shares. PetroChina trades for a modest premium to BP (NYSE: BP) (11 times earnings) and Chevron (NYSE: CVX) (11 times earnings); China Mobile is pricier than both Chunghwa Telecom (13 times earnings) and NTT DoCoMo (17 times earnings).
So while those are fine companies with real advantages in the Chinese market, American investors will be better rewarded elsewhere.

If the United States is any sort of model, companies that dominate these niches in China will do very well for investors:
Company Industry Trailing-10-Year Return
Limited Brands (NYSE: LTD) Retail 271%
Equity Inns Hotels 431%
Ameristar Casinos Casinos 1,336%
Yum! Brands (NYSE: YUM) Restaurants 378%
DR Horton (NYSE: DHI) Homebuilding 550%

Mark my words: Each one of these companies will soon have a Chinese counterpart. While that company may be small today, or may not even be public, that's the company whose shares we want to own for the next decade or more.