When margins fall, the only way to boost profits is to increase the volume of products sold. Logically, therefore, Tsingtao has responded to the jump in its raw materials costs by investing in new production facilities, and specifically by acquiring Shandong Xin Immense Brewery and Hangzhou Zijintan Wine Co. early in 2011. But highly motivated buyers, like Tsingtao, risk overpaying when they make acquisitions, and given the $2 billion spike in goodwill on Tsingtao's balance sheet last year, there's a chance that that is what the company has done in this case. Moreover, new production facilities tend to mean higher capital spending – and that, too, is just what has been seen at Tsingtao, which has increased its capital expenditures in each of the last four semiannual periods. Indeed, in two of the last three six-month periods, capital spending has exceeded cash flow from operations, a classic warning sign that a company's earnings might not be sustainable at their current levels.