No. of Recommendations: 14
Hello KPers:

Here is a list of comprehensive RM resources, included is also links to my summaries of the RM Seminar lessons.

Study these and you'll be a whiz at Rule Maker evaluation.

Erick

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RM Seminar Lesson Summaries

Lesson 1 Summary
http://boards.fool.com/Message.asp?id=1420010000011000

Lesson 2 Summary
http://boards.fool.com/Message.asp?id=1420010000058000

Lesson 3 Summary
http://boards.fool.com/Message.asp?id=1420010000093000

Lesson 4 Summary
http://boards.fool.com/Message.asp?id=1420010000129000

Lesson 5 Summary
http://boards.fool.com/Message.asp?id=1420010000156000

Lesson 6 Summary
http://boards.fool.com/Message.asp?id=1420010000207000

Lesson 7 Summary
http://boards.fool.com/Message.asp?id=1420010000249000

Lesson 8 Summary
http://boards.fool.com/Message.asp?id=1420010000280000

Lesson 9 Summary
http://boards.fool.com/Message.asp?id=1420010000321000

Lesson 10 Summary
http://boards.fool.com/Message.asp?id=1420010000365000

Lesson 11 Summary
http://boards.fool.com/Message.asp?id=1420010000391000

Lesson 12 Summary
http://boards.fool.com/Message.asp?id=1420010000413000

Lesson 13 Summary
http://boards.fool.com/Message.asp?mid=13105319

RM Resources

Useful Articles

Rule Maker Spreadsheets
http://www.fool.com/portfolios/RuleMaker/rulemakerspreadsheetinfo.htm

Rule Maker Discussion Boards
Strategies http://boards.fool.com/Messages.asp?id=1030004000000000
Companies http://boards.fool.com/messages.asp?id=1030043000000000
Beginners http://boards.fool.com/Messages.asp?id=1030058000000000
Rule Tweener Companies http://boards.fool.com/Messages.asp?id=1030061000000000

Rule Maker Portfolio Archives
http://www.fool.com/portfolios/rulemaker/2000/rulemaker2000.htm

Understanding financials
I - Drippin' Groovy "Back to Basics" (Intro to SEC Forms)
http://www.fool.com/dripport/2000/dripport000106.htm

II - Back to Basics
http://www.fool.com/dripport/2000/dripport000113.htm

III - The Balance Sheet
http://www.fool.com/dripport/2000/dripport000120.htm

IV - Noncurrent Assets
http://www.fool.com/dripport/2000/dripport000127.htm

V - Current Liabilities Explained
http://www.fool.com/dripport/2000/dripport000203.htm

VI - Understanding Noncurrent Liabilities
http://www.fool.com/dripport/2000/dripport000210.htm

VII - Finishing the Balance Sheet
http://www.fool.com/dripport/2000/dripport000217.htm

VIII - Fun With Numbers
http://www.fool.com/dripport/2000/dripport000224.htm

IX - Balance Sheet Finale
http://www.fool.com/dripport/2000/dripport000302.htm

X - Introducing the Income Statement
http://www.fool.com/dripport/2000/dripport000316.htm

XI - Income Statement Demystified
http://www.fool.com/dripport/2000/dripport000406.htm

XII - The Cost of Doing Business (COGS)
http://www.fool.com/dripport/2000/dripport000413.htm

XIII - Income Statement Odds & Ends
http://www.fool.com/dripport/2000/dripport000420.htm

XIV - Today's Buzzword : EPS
http://www.fool.com/dripport/2000/dripport000427.htm

Statement of Cash Flows
http://www.fool.com/dripport/2000/dripport000601.htm

The Value of Cash Flow
http://www.fool.com/dripport/2000/dripport000608.htm

Cash Flow Efficiency
http://www.fool.com/dripport/2000/dripport000615.htm

Calculating Cash Flow Ratios
http://www.fool.com/research/2000/features000707.htm


TMFSelena posted a series of very helpful articles on how to decipher the various parts of a financial statement over in the RM Seminar FAQ board. You may want to check them out if you are having problems understanding financial concepts.

The Balance Sheet
http://boards.fool.com/Message.asp?id=1420001100054000

The Income Statement
http://boards.fool.com/Message.asp?id=1420001100055000

The Statement of Cash Flows
http://boards.fool.com/Message.asp?id=1420001100056000

Different Names for the Same Thing
http://boards.fool.com/Message.asp?id=1420001100057000

Simpler Balance Sheet
http://boards.fool.com/Message.asp?id=1420001100058000

Simpler Income Statement
http://boards.fool.com/Message.asp?id=1420001100059000

Simpler Cash Flow Statement
http://boards.fool.com/Message.asp?id=1420001100060000

Rule Maker formulas

Spreadsheet:
http://www.fool.com/portfolios/RuleMaker/rulemakerspreadsheetinfo.htm

SALES GROWTH
Use Income Statement
Sales Growth = (Current Sales/Year-ago Sales) - 1
Sales growth of at least 10%
It is okay if both income statements are for a single quarter (as long as it is the same quarter, different years) or both are for a full year

GROSS MARGINS
Use Income Statement
Gross Margins = (Sales - Cost of Goods Sold)/Sales
Gross margins of at least 50%

NET PROFIT MARGINS
Use Income Statement
Net Profit Margins = Net Income/Sales
Net profit margins of 7% or greater

CASH-TO-DEBT RATIO
Use Balance Sheet
Cash-to-Debt Ratio = Cash/(Long Term Debt + Short Term Debt)
Cash no less than 1.5x total debt

THE FOOLISH FLOW RATIO
Use Balance Sheet
Foolish Flow Ratio = (Current Assets - Cash)/(Current Liabilities - Short Term Debt)
Foolish Flow Ratio below 1.25

CASH KING MARGIN
Use Cash Flow Statement
Cash King Margin = (Operating Cash Flow – Capital Expenditures)/Sales
Cash King Margin = Free Cash Flow/Sales
Cash King Margin of at least 10%


TERMINOLOGY

Capital Expenditures includes:
Acquisition of Property and Equipment
Capital Expenditures
Capitalized Software Costs

Cash includes:
Cash equivalents
Marketable securities
Short-term marketable securities
Investment securities
Other securities
Short-term investments
Trading assets

Cost of Goods Sold includes:
Cost of Product
Cost of Services

Current Assets include Cash and:
Accounts receivable
Trade accounts receivable
Accounts receivable -- related parties
Other receivables
Loan receivable
Inventories (includes raw materials, work-in-process, semi-finished goods, and finished goods)
Deferred tax
Prepaid income tax
Prepaid assets
Other prepaid expenses and receivables
Other current assets

Current Liabilities include:
Accounts payable
Income taxes
Current portion of long-term debt
Accrued liabilities (expenses)
Deferred/unearned revenue
"Other current liabilities"

Long-Term Debt includes:
Notes/Loans payable
Bank line of credit
Capital lease obligation
Preferred stock
Convertible notes

Operating Cash Flow includes:
Net cash provided by (used in) Operating Activities

Short-Term Debt includes:
Short-term debt
Short-term borrowings
Current portion of long-term debt
Debt maturing within one year


HELPFUL LINKS

"Current Assets on the Balance Sheet" By Phil Weiss (TMF Grape)
http://www.fool.com/portfolios/rulemaker/2000/rulemaker000627.htm

"What Is Free Cash Flow?" By Bill Mann (TMF Otter)
http://www.fool.com/portfolios/rulemaker/2000/rulemaker000412.htm

"The Many Faces of Debt" By Phil Weiss (TMF Grape)
http://www.fool.com/portfolios/RuleMaker/1999/RuleMaker990804.htm

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