FINZATI METHODOLOGY
How the Finzati Score is calculated
Finzati analyzes available annual financial information and organizes it into five quantitative dimensions. The result is a research profile designed to help users identify strengths, weaknesses, valuation concerns, and areas that deserve deeper review.
Score overview
The Investment Score ranges from 0 to 100 and is calculated from five weighted components. Finzati normally uses up to five available annual reporting periods.
The model uses the most recent available annual reporting periods.
Annual or fiscal-year records are used for the scoring calculation.
Each component and the overall result are normalized to a 0–100 scale.
Investment Score formula
Each component is scored independently and then included in the final score according to its weight.
Quality
Measures profitability, operating efficiency, returns on capital, and margin consistency.
- Return on Equity (ROE)
- Return on Invested Capital (ROIC)
- Return on Assets (ROA)
- Net profit margin
- Operating margin
- Historical margin stability
Cash Flow
Measures cash generation, conversion quality, debt coverage, and cash-flow consistency.
- Free cash flow per share
- Operating cash flow per share
- Free cash flow / operating cash flow
- Cash flow to debt
- Years with positive free cash flow
- Years with positive operating cash flow
Growth
Measures recent growth and longer-term growth per share using available annual periods.
- Revenue growth
- EPS growth
- Net income growth
- Operating income growth
- Revenue per-share CAGR
- Free cash flow per-share CAGR
Valuation
Measures how demanding the current valuation is relative to earnings, sales, book value, cash flow, and operating performance.
- Price / Earnings
- Price / Sales
- Price / Book
- Price / Free Cash Flow
- Enterprise Value / EBITDA
Financial Strength
Measures leverage, liquidity, short-term coverage, and the ability to meet financial obligations.
- Debt / Equity
- Current ratio
- Quick ratio
- Interest coverage
How Confidence is calculated
Confidence measures data depth and completeness. It does not estimate future performance and is not the probability that the profile will be correct.
Completeness review
The latest annual period is reviewed for the availability of key valuation, profitability, growth, cash-flow, leverage, and liquidity metrics.
Historical coverage
Data reliability adjustments
Fewer than three annual periods
The overall score is reduced when the historical record is too short.
Confidence below 55
The overall score is reduced when data coverage or completeness is limited.
Final score boundary
After all calculations, the final result is restricted to the 0–100 range.
How profile labels are assigned
Profile labels depend on the overall score and, for stronger classifications, minimum quality, cash-flow, and valuation conditions.
Highly favorable profile
Requires strong overall evidence, Quality of at least 70, Cash Flow of at least 65, and Valuation of at least 45.
Favorable profile
Requires an overall score of at least 70 and a Valuation score of at least 35.
Balanced profile
The evidence is mixed, moderate, or not strong enough for a higher classification.
Cautious profile
The available evidence contains meaningful weaknesses or elevated risk factors.
Weak profile
The available financial evidence is weak across several evaluated dimensions.
Why a company received its score
Company pages may display specific supporting reasons such as strong ROE, positive free cash flow, consistent cash generation, reasonable valuation, high debt, weak liquidity, or negative growth. These reasons are generated from the same financial inputs used by the scoring model.
Important limitations
Scores depend on source data, reporting periods, restatements, missing fields, accounting differences, and model assumptions. The methodology does not evaluate every qualitative factor and does not consider a user's objectives, portfolio, time horizon, tax situation, liquidity needs, or risk tolerance.