Academy

The terms and metrics used in the tables.

How to read a score

From 0 to 100: it compares the company with those of its sector on each factor; 100 is the best of the group.
There is a shareholder score and a creditor score, kept separate.
If too much data is missing, it is not shown: a figure is never made up.

Glossary

LTM: Short for last twelve months: the sum of a flow figure over the latest year, even if that year does not match the fiscal year.
EBITDA: Operating profit before depreciation and amortisation: it approximates the cash the business generates.
Net debt: Financial debt minus cash and equivalents.
EV: Short for enterprise value: market capitalisation plus net debt.
FCF: Short for free cash flow: operating cash flow minus capital expenditure on fixed assets.
Spread: Extra yield of a bond over the risk-free benchmark, in basis points (100 bp = 1 %).
Rating bucket: Group of ratings with the same letter (A, BBB, BB…).
Seniority: Order in which a bond is repaid if the company defaults: secured, senior, subordinated.
Percentile: Position of a value within its group, from 0 to 100 (100 is the best).
Coverage: Share of the weight of the applicable factors that has data.

Metrics

Equity

P/E · x · lower is better

Number of times market capitalisation covers the attributable net income of the last twelve months.

Market capitalisation / LTM attributable net income

The lower it is, the cheaper the share relative to its earnings. Best compared within the sector: growth and risk justify different multiples.

EV/EBITDA · x · lower is better

Enterprise value (market capitalisation plus net debt) relative to EBITDA over the last twelve months.

(Market capitalisation + Financial debt − Cash) / LTM EBITDA

The lower it is, the cheaper the company relative to its operating earnings, regardless of how it is financed. Simplification: enterprise value does not include minority interests or other adjustments.

FCF yield · % · higher is better

Free cash flow over the last twelve months relative to market capitalisation.

(LTM operating cash flow − LTM capex) / Market capitalisation

The higher it is, the more cash the company generates per euro of market capitalisation. A negative value means it burns cash.

ROE · % · higher is better

Return of attributable net income on attributable equity at the end of the period.

LTM attributable net income / Attributable equity at period end

The higher it is, the more profitable the shareholders' capital. High leverage can inflate it: read it together with debt.

ROIC · % · higher is better

After-tax operating return on invested capital (equity plus net debt).

LTM EBIT × (1 − notional tax rate) / (Total equity + Financial debt − Cash)

The higher it is, the more value the company creates with the capital it employs. The notional tax rate (25 % by default) is set in config/analysis.yaml.

EBITDA margin · % · higher is better

Share of revenue that turns into EBITDA.

LTM EBITDA / LTM revenue

The higher it is, the more profitable the operations. Margins differ widely between sectors.

Gross margin · % · higher is better

Share of revenue left after the direct cost of what is sold. It measures pricing power and business quality.

LTM gross profit / LTM revenue

A high and stable gross margin usually points to competitive advantages. Compare it within the same sector: a manufacturer's and a distributor's gross margins are not alike.

Cash conversion · % · higher is better

Share of net income that turns into free cash flow. It tells the profit that is collected from the profit that is only in the accounts.

(LTM operating cash flow − LTM capex) / LTM net income attributable

Near or above 100 %, profit turns into cash. Well below, the business consumes cash in investment or working capital.

Revenue growth · % · higher is better

Change in revenue over the last twelve months versus the previous twelve months.

LTM revenue / LTM revenue a year earlier − 1

The higher it is, the faster the business grows. It is calculated in the reporting currency so as not to mix in the effect of exchange rates.

Credit

Net debt/EBITDA · x · lower is better

Years of EBITDA needed to repay net debt.

(Financial debt − Cash) / LTM EBITDA

The lower it is, the lower the indebtedness. A negative value means net cash (more cash than debt).

Interest coverage · x · higher is better

Number of times EBITDA covers interest expense.

LTM EBITDA / LTM interest expense

The higher it is, the more headroom to pay interest.

Debt/equity · x · lower is better

Financial debt relative to total equity.

Financial debt / Total equity

The lower it is, the less leveraged the company's balance sheet.

Spread versus its rating bucket · bp · higher is better

Difference between each bond's spread and the median of the bonds in the same rating bucket. For the company, the median of its bonds.

Per bond: Bond spread − Median spread of the bonds in the same rating bucket and of the same spread type. Per company: median of its bonds.

Positive: the bond pays more than its rating peers (more compensation for the same rating). Negative: it pays less. In the credit score, higher scores better; deterioration is monitored through the alerts and the leverage factors.

Amounts in euros

Market capitalisation · M EUR · informative

Stock-market value of all the company's shares.

Share price × Shares outstanding, converted to euros at the exchange rate of the price date

Size of the company on the stock market; useful to screen the universe.

Enterprise value (EV) · M EUR · informative

Market capitalisation plus net debt: the value of the business to all its providers of capital.

(Market capitalisation + Financial debt − Cash) in the reporting currency, converted to euros at the exchange rate of the price date

Basis of the enterprise-value multiples (EV/EBITDA).

LTM revenue · M EUR · informative

Revenue over the last twelve months, in euros.

LTM revenue converted to euros at the average exchange rate of those twelve months

Size of the business, comparable across companies with different currencies.

LTM EBITDA · M EUR · informative

EBITDA over the last twelve months, in euros.

LTM EBITDA converted to euros at the average exchange rate of those twelve months

Operating earnings of the business, comparable across currencies.

Net debt · M EUR · informative

Financial debt minus cash at period end, in euros.

(Financial debt − Cash) converted to euros at the exchange rate of the period-end date

Indebtedness in absolute terms; negative if there is net cash.

The scores summarise metrics compared with similar companies, and the alerts point to specific facts. Nothing shown here is a recommendation to buy or sell.