Docs/Core concepts/Health score
Core concepts

Health Score Methodology

A 0-100 rating computed from audited XBRL. This page lists every component, threshold, and point weight that goes into the score.

Formula

Score
Score = Base (50) + Stability (0-20) + Profitability (0-20) + Cash Flow (0-10) + Industry Adjustment (-5 to +5)
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Base: 50 points

Every company starts at 50, a neutral midpoint. Components add or subtract from this base.

Components

Stability (max 20 points)

Measures financial resilience through equity ratio and revenue trend.

  • Equity ratio vs sector baseline (0-10 pts): Scaled linearly. Companies at 1.5x the sector baseline get full marks.
  • Revenue trend (0-10 pts): Proportion of years with revenue growth over the last 5 years. 3+ consecutive declines trigger a flag.

Profitability (max 20 points)

Evaluates earning power and returns.

  • Net income positive (5 pts): Binary, profitable companies get 5 points.
  • Operating margin vs sector baseline (0-10 pts): Scaled linearly. Companies at 2x the baseline get full marks.
  • ROE (0-5 pts): ROE >= 15% gets 5 points, >= 8% gets partial credit, linearly scaled.

Cash Flow (max 10 points)

Checks actual cash generation.

  • Positive operating cash flow (5 pts): Binary, positive OCF gets 5 points.
  • Positive free cash flow (0-5 pts): Operating CF + investing CF > 0 gets 5 points. If investing exceeds operating but OCF is positive, 2.5 points.

Industry Adjustment (-5 to +5 points)

Adjusts for sector-specific norms. A bank's 5% equity ratio is normal; a tech company's 5% is alarming. Compares equity ratio and operating margin against TSE 33-sector medians.

Score Grades

GradeBand
SS (80-100): Excellent financial health
AA (70-79): Strong
BB (60-69): Good
CC (40-59): Average
DD (20-39): Weak
EE (0-19): Critical

Risk Flags

The score also returns qualitative risk flags:

  • low_equity_ratio: Equity ratio below 10%
  • net_loss: Company reported a net loss
  • operating_loss: Negative operating income
  • negative_operating_cf: Negative operating cash flow
  • consecutive_revenue_decline: 3+ years of revenue decline
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Verifiable by construction.

All scores are computed from audited XBRL data. The components dict in the API response shows the exact point breakdown so you can verify the calculation.