If we examine the outstanding shares, we can also see that Chase (CCF) has been quite conservative with issuing shares.  In fact, 8 million shares are reported in 2003 and four years later, the company still reports only 8 million shares.  In contrast, you can view the Morningstar.com "5-Yr Financials" on Sirius, not a favorite of mine, that has increased its shares from 827 million in 2003 to 1.47 billion in the trailing twelve months.  I do not know if CCF will be a better investment that SIRI tomorrow, next week, or next year.  I am just using this example to explain my attempt to identify what I call a 'quality' investment, that for me includes a certain reluctance on the part of management to issue an excessive amount of new shares.

Insofar as 'free cash flow' is concerned, I want to see creation of 'free cash' instead of a cash burn rate that was so common during the dot com bubble.  For Chase, they  generated $3 million in cash flow in 2005, increased it to $9 million in 2006, $11 million in 2007 and $12 million in the TTM.  Perfect.

And the balance sheet.  Again, I am not a genius, but at least on these tables I want to see more assets than liabilities.  Sort of like having more cash in the bank than bills to pay :).  Don't we all want that sort of balance sheet?

In Chase's case,  they are reported by Morningstar to have $1 million in cash and $37 million in other current assets.  This total of $38 million in current assets (things that can be easily converted into cash within the next 12 months), easily covers both the $16.1 million in current liabilities (with a current ratio of 2.375---a healthy ratio from my perspective) and the $10.9 million in long-term liabilities combined.

In terms of valuation, I am also always looking for a 'good deal'!  That doesn't mean I am a value investor, but that value plays an important part in any investment decision.