The first thing that should strike you about Houston Sash & Door’s balance sheet and income statement is that both are prominently labeled “Unaudited.” What does this mean? It doesn’t have anything to do with whether the IRS or anyone else from the government has exami...

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Reviewing documents is easy compared with ferreting out all the information you need to know about a business’s suppliers and customers. But when you think of it, there’s nothing more pivotal to a business’s success or failure than its dealings with its suppliers and customers.

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Sounds simple enough, doesn’t it? After all, we said Houston Sash & Door, Inc., buys lumber and manufactures doors and windows, which it sells to general contractors. Many businesses, however, are engaged in two or more different, but similar, lines of work; they have more than one prof...

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Let’s assume that the following events have already occurred. After doing an adequate amount of soul-searching, you’ve decided a business engaged in some form of construction is for you. You’ve always been a pretty good amateur carpenter and can speak the language of the buildin...

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Let’s assume you’ve got a pretty good fix on the type of business you’re best suited for. How do you find this business? Unfortunately, most people select a business in the worst way: by hearing about one available business and buying it. Just as you probably wouldn’t buy ...

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We’re getting into the realm of the analysis of a particular business, which we’ll cover in depth in the next chapters, but this point is worth covering here: Every business has a style and personality that it has adopted from its owners and that you’ll adopt when you buy it. If...

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Let’s assume that the following events have already occurred. After doing an adequate amount of soulsearching, you’ve decided a business engaged in some form of construction is for you. You’ve always been a pretty good amateur carpenter and can speak the language of the building...

Read more