Last week’s answer

Fifty years old, I’m based in San Diego, and you’ll find my offerings under the sink, in the garage and in toolboxes. It took 40 tries to develop my flagship product (which shares my name) as a Water Displacement formula. My Web site lists more than 2,000 uses for it, such as dissolving toupee tape residue, keeping pigeons off balconies and removing a python from a bus. My other brands include 3-IN-ONE Oil, Lava, X-14, Solvol, Carpet Fresh and Spot Shot. I sell my goods in more than 160 countries and raked in $217 million in sales in 2002. Who am I? (Answer: WD-40 Co.)

Quarterly reviews

If you own stocks in your portfolio, you might want to aim to hold stock in no more than about eight to 15 high-quality companies. Why? Well, if you own too many companies, you won’t be able to keep up with them.

It’s best to review most companies at least every three months. (If they’re old, established giants such as Coca-Cola or Procter & Gamble, you might get away with checking in on them twice a year, but quarterly is best.) If you hold stock in 30 companies, that amounts to 120 quarterly reviews per year, more than the average investor likely has time or energy for.

Start by reviewing your companies’ quarterly reports. Most publicly traded American businesses issue an annual report along with a more detailed 10-K report once a year. In the intervening quarters, they issue abbreviated (but still enlightening) 10-Q reports. Each of these features important financial statements that track sales, profits, debt loads, inventory levels and more.

Public companies also often hold quarterly conference calls between management and Wall Street analysts. Many open these up to the public and provide access via their Web sites. These calls can help you stay in touch with your business, as you learn not only from the information given but also from the tone of the questioners and management. Click over to www.bestcalls.com for access to many conference calls.

It’s also good to regularly visit each company’s Web site, to read press releases and see how they present themselves to the world. You can also check out what people are saying about a company in online discussion boards, such as those at boards.fool.com and biz.yahoo.com/co.

As you review your holdings, ask yourself: Is this company still on track? What progress is it making and what obstacles is it encountering? Is it going in any new directions? Is management clearly laying out and delivering on a convincing strategy? Are there any red flags in the financial statements’ numbers? Do I still believe in its future? Should I hold on?

The more you know, the better your portfolio should perform.

Heinz squeezes out growth

Every time Heinz (NYSE: HNZ) reports earnings, it’s worth taking a peek to see if it’s making any progress toward reversing 15 years of disappointing performance. It seems this ketchup company just can’t cut the mustard despite having one of the best brands in America.

Heinz’s recent first-quarter results were much better than what we saw three months ago, when higher costs and lower sales led to sharply lower earnings. This time Heinz poured out a profit of $0.51 per share from continuing operations — 9 percent higher than the same period last year — on a 3 percent rise in sales.

The company spun off some of its noncore businesses to Del Monte (NYSE: DLM) last December in an effort to focus on what it does best. By concentrating on condiments and sauces and jettisoning less-profitable products, it was able to increase its profit margins. Some credit can go to its innovative ways of serving up the same sauce: Ketchup sales were spurred by “easy squeeze” upside-down bottles, colored ketchup for kids, and new garlic, mesquite and Tabasco-flavored Kick’rs.

In the future, look for Heinz to sell off even more of its low-margin businesses, and continue to try to pay down some of its $4.7 billion in debt.

Meanwhile, in a year when the S&P 500 is up about 12 percent, the company’s stock is barely above breakeven. We can’t blame investors for not giving the ketchup king a squeeze.

Variety of investment notes offer different risk levels

What are investment “notes”? Are they risky? — G.R., Springfield, Ill.

“Note” usually refers to an intermediate-term bond, with a life of between two and 10 years. Notes vary in riskiness. Least risky are Treasury notes, sold by the government. More risky would be corporate bonds, issued by companies of varying quality. Higher-quality firms offer lower rates, while enterprises with lackluster credit ratings must offer higher interest rates in order to find buyers. “Junk bonds” are those with high rates and relatively shaky issuers.

Can you explain the “accrual” method of recognizing sales? — T.M., Allentown, Pa.

Gladly. It’s an important accounting concept to understand, because with the accrual accounting system, the “revenues” on a company’s income statement may not have actually been received by the company.

Revenues, sometimes referred to as “sales,” don’t necessarily represent the receipt of cash in a sale. Many firms “accrue” revenues, booking sales when goods are shipped, when services are rendered, or as a long-term contract proceeds through stages of completion.

Imagine the Dodgeball Supply Co. (ticker: WHAPP). With the accrual method, if it has shipped off a thousand crates of dodgeballs but hasn’t yet received payment for them, those sales still appear on the income statement. The checks “in the mail,” not all of which may ever arrive, get reported as “accounts receivable” on the balance sheet.

Keep an eye on a company’s receivables, and make sure they’re not growing faster than sales.

Grab your 15 minutes of fame and ask a financial question or share your thoughts with Fool co-founders David and Tom Gardner on The Motley Fool Radio Show. Call anytime toll-free at (866) 677-3665.