CompanyGraph
QARP joins two separate hypotheses: the business shows financially supported growth, and the price does not require implausible future results.
What is QARP investing?
Quality at a reasonable price seeks companies with attractive operating characteristics at valuations that leave room for error. Neither word has a universal threshold. Quality concerns cash, returns, durability, governance, and reinvestment; reasonable price concerns future cash expectations and downside.
Which CompanyGraph panel represents quality growth?
The Cash-Backed Growth Configuration requires elevated latest-annual operating cash flow relative to net income, an elevated multi-year revenue-growth consistency composite, and elevated trailing operating-cash-flow margin relative to industry peers.
A match is a current coexistence of those readings. It does not prove a compounding mechanism, competitive advantage, or future growth.
Cash-Backed Growth Configuration
Three present-state observations co-occur: OCF/Net Income elevated, revenue growth composite elevated, and trailing OCF margin elevated
Which panel represents a reasonable price?
The At Graham Number With Cash Backing and Equity interpretation requires price at or below its configured Graham-number ceiling, elevated annual OCF/net income, and high equity/assets.
The Graham number is a historical rule of thumb, not intrinsic value. It may fit poorly for asset-light, cyclical, loss-making, or high-growth companies.
At Graham Number With Cash Backing And Equity
Current price is at or below the Graham Number model ceiling (√(22.5 × EPS × BVPS)) while OCF exceeds net income and equity is in the upper part of its industry's equity-to-assets range
How do you combine the QARP panels?
Select both only if their assumptions fit the universe. CompanyGraph requires every observation across both panels to fire, including a repeated cash-to-income idea. A zero result means no current company met the strict combined configuration with available data; it does not invalidate QARP.
How do you verify business quality?
Reconcile earnings to cash over several periods under IAS 7. Investigate customer retention, price, units, capacity, maintenance, working capital, acquisitions, return on new investment, leverage, and dilution. One working-capital release can flatter current cash backing.
How do you test whether price is reasonable?
Use several valuation methods and scenarios rather than one ceiling. Normalize margins, cyclicality, capex, taxes, and share count. Test what growth and returns the current price implies. Review asset recoverability under the IAS 36 framework where book value matters.
Why were four other panels removed?
The stale cash-backed earnings key describes depreciation-heavy cash composition; the broader cash-flow panel duplicates quality inputs; inverse price-to-book introduces a different value thesis; and retained earnings with payout is not a reasonable-price measure. Removing them keeps the QARP question coherent.
What can the QARP screen not tell you?
It cannot predict durability, management allocation, competitive response, intrinsic value, or return. Use the two-panel screen as a candidate generator, then evaluate the full business and a valuation range.