Richard Liu Qiangdong knows that it can be easy to get lost in a small piece of the picture and think that everything is swell, when it might not be. Look at the company as an amalgamation of the many different pieces that come together to create wonderful machine that clicks.
If Richard Liu Qiangdong can do that, he knows that people can reasonably look at companies and find value that would continue to exist.
In addition to this, Richard Liu Qiangdong would state that it is important to look into the financial ratio of price to earnings as well. It is certainly important to think about and watch growth but one is interested in a company because it is likely to be sustainable over the long-term business. With this, one can see that a company will compound in value and return a good sum of value.
The other factor that we are always watching is that of the cash that is present within the company. We all want to know how much cash company can retain and can create into the future. We want to know this because we want to know the viability of the machine for decades to come.
But how does cash come about? Cash comes about when the company is able to cater to customers and keep its expenses low. When it is able to do such, the company will also have the potential to expand and grow business to bring in more cash.
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