Methodology
This page is the whole of it. Every cutoff a report uses is written out below, so you can work out any score yourself from the figures on the page it appears on.
Where the numbers come from
Company figures are read from filings made to the U.S. Securities and Exchange Commission, through its EDGAR system — the same documents the company filed, not a summary of them. Share prices come from a licensed market-data provider. Every report says which filing each figure came from and the date the price was taken.
Public reports use historical filed figures and calculations derived from them. Any permission-restricted modeled scenarios show their assumptions where they appear. Analyst estimates identify their source and date.
Public report scores are not models
Every public report score and reading is arithmetic against the fixed thresholds below. The same filing produces the same score every time, and no model decides anything. The paragraph on the market dashboard is written by a small language model from figures computed before it runs.
Business quality
Four pillars, each scored 1 to 5. The business-quality figure is their average, and it is a measure of the historical operating record only. It does not assess the price, value, attractiveness, or expected return of the shares and is not an investment recommendation.
Growth
Revenue growth, year on year
| 5 of 5 | 20% or more |
| 4 | 10% to 20% |
| 3 | 5% to 10% |
| 2 | 0% to 5% |
| 1 | Revenue fell |
Profit
The average of three: operating margin, net margin, return on equity
| 5 of 5 | Operating margin 25%+ · net margin 20%+ · ROE 25%+ |
| 4 | Operating 15–25% · net 12–20% · ROE 15–25% |
| 3 | Operating 8–15% · net 6–12% · ROE 10–15% |
| 2 | Operating 3–8% · net 0–6% · ROE 5–10% |
| 1 | Operating under 3% · net loss · ROE under 5% |
Balance sheet
The average of three: debt to equity, assets to equity, current ratio
| 5 of 5 | Debt/equity under 0.3 · assets/equity under 1.5 · current ratio 2.0+ |
| 4 | Debt/equity 0.3–0.8 · assets/equity 1.5–2.5 · current 1.5–2.0 |
| 3 | Debt/equity 0.8–1.5 · assets/equity 2.5–4.0 · current 1.0–1.5 |
| 2 | Debt/equity 1.5–2.5 · assets/equity 4.0–6.0 · current 0.8–1.0 |
| 1 | Debt/equity 2.5+ · assets/equity 6.0+ · current under 0.8 |
Cash
Operating cash flow divided by net income — whether the profit arrives as cash
| 5 of 5 | 1.5× or more |
| 4 | 1.1× to 1.5× |
| 3 | 0.9× to 1.1× |
| 2 | 0.6× to 0.9× |
| 1 | Under 0.6× |
One exception, and it matters. Cash is scored on a ratio that goes sign-blind over a loss: negative cash divided by a negative profit is a large positive number, and the plain rule would rate a company burning money 5 of 5. So where a company reported a loss, the ratio is not used at all — the score is 3 if operating cash flow was positive and 1 if it was not.
How it holds up
A separate score, from five parts averaged: how far the price has fallen from its own peak, how much it swings in a year, debt to equity, the current ratio, and whether free cash flow and net cash give the company something to absorb a shock with. The first two are read from five years of prices; the rest from the filings.
What changes for REITs, banks and lenders
Some ratios mean nothing for some businesses, and scoring them anyway would be worse than leaving them out. Where a figure is set aside, the report says so in place rather than hiding the gap, and the pillar is averaged over what remains.
- REITs are not judged on return on equity, gross margin, P/E or price to sales. Depreciation on buildings that are not losing value crushes both reported earnings and equity, and rent has almost no cost of sales.
- Banks, lenders and insurers are not judged on the current ratio, debt to equity, assets to equity, gross margin, free cash flow or cash conversion. Borrowing is their raw material rather than a warning sign, and free cash flow is not defined for them the way it is for an industrial company. Their return on equity is scored on its own scale.
- Asset managers and capital-markets firms stay on the general scale. A fee business has a real current ratio and real operating cash flow, and setting those aside would delete true signal rather than remove a false one.
What we deliberately do not do
- We do not score the price. P/E, price to sales, price to book, EV/EBITDA, free-cash-flow yield and P/FFO appear as figures, with a plain line saying what each one measures. They carry no score, no grade and no colour, and they are not part of the business-quality figure.
- Public reports do not say a share is cheap, expensive, undervalued, overvalued, attractive or worth holding, and publish no fair value, price target or valuation range.
- Public reports do not forecast. Permission-restricted views may contain modeled scenarios with assumptions shown; analyst estimates identify their source and date.
- We do not personalise. Everyone who opens a company sees the same report; we do not ask what you own, what you earn or what you are trying to do, and we could not use it if we did.
- We do not rank companies against each other, and nobody pays us to cover anything.
Why we hold that line is set out in the Terms, section 3.
When the numbers change
Reports are rebuilt nightly, so a new filing or a new closing price reaches a report without anyone asking. The scoring rules themselves carry a version: a report scored under an older rulebook is recomputed when it is next opened rather than served as it was, so you are never reading a score against cutoffs that no longer exist.
Found something here that does not match a report? Tell us at office@syntopia.bg — a methodology that has drifted from the code is a bug, and we will fix it.