Joel Tillinghast
Avoid the losers. Debt is how most of them are made.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 |
| Net margin | Net income ÷ revenue | 10.2% | 3.6% – 18.5% | 549 |
| Positive earnings, ten years running | Needs ten years of filings | — | — | — |
Where each comes from
| Debt to equity | The book returns repeatedly to leverage as the thing that turns a poor business into a permanent loss. |
|---|---|
| Net margin | Profitability as the marker of a business worth owning at all. |
| Positive earnings, ten years running | Graham's fourth defensive criterion, and the only one of his that needs a decade: some earnings in every one of the past ten years. A single loss year fails it. |
Source: Big Money Thinks Small, 2017.
What this cannot tell you
Most of the book is about avoiding your own mistakes — biases, hurry, unfamiliar businesses. None of that is a property of the company.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics