
A key component of any investment decision is the evaluation of the fundamental health of a company. The H-Score assesses the robustness of a company's balance sheet and identifies companies that can survive when they suffer a downturn in earnings; and it identifies those that cannot.
The unique financial modelling tool enables investors to analyse the impact of changes in a company's financial structure: what happens to financial health in the event of an acquisition, a write down in assets, or a downturn in profits can be immediately assessed using Company Watch's online Business Intelligence system.
"The H-Score is one of the inputs I review every time I look at a company".
"When I've analysed the biggest mistakes I've made over the years, they have nearly always been in companies with poor balance sheets [...] If I had my time again in running my funds and had avoided every share with a bottom quartile sector H-Score I might have missed a few winners, but I believe I would have avoided most of my disasters."
Extracted from Anthony Bolton, Investing Against the Tide, Edinburgh: Pearson Education Limited, 2009 © Anthony Bolton, 2009.
The H-Score measures the financial health of any company. Companies in the Warning Area (H-Score of 25 or less) display the characteristics of previously failed companies and may themselves be vulnerable to distress.
Click below to see the H-Score at Work!