Usually, before deciding to invest in a company, I prefer to to look at 2 figures in their balance sheet
- Current asset
- Current liabilities
Very often, I assume the company with
Current asset > Current liabilities
are considered as healthy company. I further testify my assumption with a few well known quality companies and several companies in trouble. I realize my assumption seems correct.
I was wondering, whether they are good method? Is there any important figures I should look into, to cross check the healthiness of a company?