Long term success in investing requires you limit your losses. One way to lose money: High debt. The three metrics I use to track financial health: 1. Free Cash Flow / Debt 2. Debt / Equity 3. Interest Coverage Here's why I like these three: Free Cash Flow / Debt This is my favorite. It gives me a simple view of how easily my business can pay off debt with FCF. Why FCF? It means the business can pay off debt without taking money away from other important areas (or getting into more debt) I keep this below .33 Debt / Equity This equation shows how much of the business is owned by creditors vs how much of the business is owned by shareholders. I prefer businesses that are owned mostly by shareholders are require minimal amounts of debt to operate and grow. A decent number is below 2. Interest Coverage Most businesses require some debt to operate it's important that a business can pay off its interest expense. This metric shows how many turns of interest payments a business can pay off using earnings before interest and taxes. I like this in double digits. If you'd like to: • Learn more about these ratios • Learn about 4 more metrics for tracking performance • See these numbers for my portfolio holdings Then read more here 👇🏽 https://thethinkinginvestor24.substack.com/p/7-portfolio-metrics-i-use-to-measure That's a wrap! If you enjoyed this thread: 1. Follow me @IrrationalMrkts for more of these 2.. RT the tweet below to share this thread with your audience If you're not subscribed to Saturday Multi-bagger Wisdom yet, here's why you should be: • Frameworks specifically for retail investors • In-depth guides for improving your stock analysis • Informative stories weaved easily useable investing lessons http://thethinkinginvestor.ca