The Checklist Every Company Must Pass

Can we explain how it makes money in two minutes?

Revenue streams, customers and industry dynamics — in plain words.

Does it have a durable competitive advantage?

Brand, network effects, switching costs or scale that competitors can't easily copy.

Would we still want to own it in 10 years?

Secular trends and risks: is the industry growing, shrinking or being disrupted?

Is management honest and skilled at allocating capital?

Track record, insider ownership, buybacks vs. dilution.

Is revenue growing consistently?

Multi-year trend, not a single good quarter.

Are margins expanding or at least stable?

Gross and operating margins vs. industry peers.

Does it generate real free cash flow?

Profits that turn into cash, not accounting fiction.

Is the balance sheet strong enough to survive a crisis?

Debt levels, liquidity and interest coverage under stress.

Do we have a valuation range, not a single number?

Multiple methods: multiples, DCF and owner earnings.

Is there a margin of safety vs. our estimate?

We only buy when the price gives us room to be wrong.

Have we written the bear case before buying?

What would break the thesis — written down before the first share.

Do we know what would make us sell?

Thesis broken, better opportunity, or extreme valuation.