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Consumer companies least stressed
Sep 8, 2012


In the highly volatile and uncertain times like the one we are living in currently, one wonders as to who will eventually survive. Herein Herbert Spencer's concept of 'Survival of the fittest' comes in to mind. The concept applies as much to investments as it does to evolution of life. You see in tough times only those companies that are 'fit' can survive. These are the companies with resilient business models, strong fundamentals and healthy balance sheets . This chart shows the results of one such study carried out by Morgan Stanley and printed by Economic Times. The study uses the Altman Z-score to study 5 different financial ratios to estimate the risk of extreme financial stress for 104 companies. In simple words it checks the strength of the company's balance sheet and financials to withstand tough times. Interestingly the companies that excelled in this were those that derive their fortunes from domestic consumption.

Data Source: The Economic Times, Morgan Stanley

This Chart Of The Day was published in The 5 Minute WrapUp - The 'magic formula' for winning in the stock markets

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1 Responses to "Consumer companies least stressed"

Shankar

Sep 10, 2012

Funny, simple and required detail is missing from this article.
Is higher number is better or lower number is better. My assumption is higher number is better.

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