What will say about a company using a very high gearing with an excellent looking Profit& Loss Account but a relatively inferior Balance sheet.Also Basant, kindly know some light on the quants you use to qualify something as good company.Just that I wantto adopt investing more as a science and less as an art. I am an apt follower of the belief that those who forget history are condemned to repeat it. My personal fancy is therefore for excellent Balance Sheets and then I look at P/L Accounts. In other way, a good balance sheet is a necesarry conddition and a good P/L is a sufficient condition for investment.There's a reason why I initiated this thread. I am finding people simply forgetting to talk about Balance sheet when they read out investment ideas.I definitelu agree that P/L feeds balance sheet, but then the historical overhang of the B/S should also be a priority, if I am not wrong. also, when we look at P/L we ignore many important items like depreciation and interst outgo.By we I mean most of the investment advisors.

I think Mr.Basant is quite rite in his saying that a good business model and good mgmt. are the first two things to look before investing and then go for any financial interpretation. As all the financial staements can be manipulated which as seen many times like in case of Enron,Worldcom etc. I am not saying that they are not helpful infact they are the most imporatnt  things but  still the other things remains who runs the business.

Basantji or other senior members,