When a bank or a venture debt company lends money to a startup, credit ratings and credit scores are handy tools. However, those are usually only available to larger companies. There is no well-established indicator for small and medium-sized companies representing their financial health.
At Calqulate we offer the Financial Health Index. It measures a company’s financial health, profitability and liquidity, and calculates a value between 0-100%. It is based on different metrics and uses ratios from three different metric groups: Liquidity, Profitability, and Solvency.
Go to INDICES > Financial Health and choose the Financial Health tab. This tab is divided into three important sections: the Financial Health Index, the Financial Health Metrics, and the Financial Health Index evolution.
The Financial Health Index displays your overall performance on a speedometer (gauge) chart. Your company scores between 0 and 100 %, whereby 100 % is the best possible result. The Financial Health Metrics, which are displayed on the right side of the screens, lists all metrics that are used to calculate the index value. All metrics are listed with the ratio and the score in percentage so you can understand how the index value is calculated. The chart below it shows the evolution of the Financial Health Index.
If you click on one of the other three tabs (e. g. Solvency) you can see the respective charts for this category. All metrics from the Financial Health Metrics chart are divided into three categories, namely Liquidity, Profitability, and Solvency. By choosing one of the categories, every metric of this category is displayed in an individual chart. Thereby, you can check all metrics in detail and understand how the Financial Health Index score is calculated.
That's it. You have now learned what the Financial Health Index is and how it works.
Updated 3 months ago