10 Top Questions to Ask Before You Buy a Stock

It may seem like a given that you should do your homework before plunking down your hard-earned cash on a company's stock -- but many people don't.

As stock market crashes have taught us, a carefree investing style doesn't work forever. In fact, its success usually comes to an abrupt end. It would behoove investors to relearn that painful lesson before the next crash (especially given where the stock market is currently).
With that in mind, here are 10 questions investors should ask -- and answer -- before buying a stock.
Of course, knowing all the answers doesn't guarantee a winning stock. Nothing can do that. But over the long haul, taking the time to consider these questions will make one a better, more well-informed investor.

What Does the Company Do?

Warren Buffett famously says he doesn't invest in what he doesn't understand. If the greatest investor of the past 60 years is brave enough to acknowledge that he doesn't understand all companies, we should all probably take heed. This first basic question is a simple one, but that doesn't mean it's easy. To answer the question, there are plenty of places to look, including the company's website.

Is the Company Profitable?