1. Industrial firms should have current assets worth at least twice their current liabilities. Long-term debt should not exceed working capital.
2. The stock should have paid dividends for the last 20 years.
3. The company should have a minimum increase of at least one-third in per share earnings in the past ten years using three year averages at the beginning and end
4. The current stock price should not be more than 15 times the last three years’ average earnings.
5. The current stock price should not be more than 1.5 times the last reported book value.
(Warren Buffett : An Illustrated Biography of the World’s Most Successful Investor)