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Test Your Knowledge

 
1. What is the minimum level of current quarterly sales growth you should look for if prior quarters of sales growth have not been accelerating?
  A) 15%  
  B) 25%  
  C) 35%  
  D) 70%  
 
2. For most companies, pre-tax profit margins should be at least _____.
  A) 10%  
  B) 14%  
  C) 18%  
  D) 25%  
 
3. Look for a company to have a minimum return on equity of at least _____.
  A) 6%  
  B) 17%  
  C) 25%  
  D) The return on equity is irrelevant, as long as the ROE is among the highest for its industry group.  
 
4. For most companies you want after-tax profit margins to be:
  A) At or within 10% of its all-time high.  
  B) At least 70% of its pretax profit margin.  
  C) Accelerating for a minimum of 3 quarters.  
  D) 17%  
 
5. Which of the following financial indicators is not a component of IBD's SMR Rating?
  A) Sales growth  
  B) Pretax profit margins  
  C) Shareholder equity  
  D) Return on equity  
   
   
Score =
 
Correct answers:
 
Proceed To The Next Lesson»
 
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