ASSA ABLOY's debt situation was good. Their debt decreased from 2018 to 2020 but increased significantly in the years following. According to Buffett, ASSA ABLOY is not a durable, competitive company with a low or manageable debt level, which raises some red flags about its investment potential. . Buffet states that while consistency is good, a company should have a percentage of less than 30%. However, he also states that a percentage of 30 to 80% indicates a possible competitive advantage, meaning that ASSA ABLOY probably has a durable, competitive advantage. This is a lower interest expense and this is genrally favorable as it indicates lower financial risk. Buffet says if a company's capital expenditures are 25% or less, they have a competitive advantage. Would this be a company that Buffett would potentially invest in? Would you recommend an investment in this company?

Answer rating: 100% (QA)

Based on the information provided it seems that ASSA ABLOY has exhibited some mixed signals in terms of its debt situation and competitive advantage a... View the full answer