Value Line is easier to read than a balance sheet, so if you’ve never looked at any of this, start there. It tells you about cash and debt, summarizes the long-term record so you can see what happened during the last recession, whether earnings are on the upswing, whether dividends have always been paid, etc. Finally, it rates companies for financial strength on a simple scale of 1 to 5, giving you a rough idea of a company’s ability to withstand adversity. (There’s also a rating system for the “timeliness” of stocks, but I don’t pay attention to that.)
