Financial Health Flag: What does the performance indicator “Financial health” mean?

The Financial Health Flag is an early warning signal based on the available financial information. It highlights companies that show multiple signs of financial weakness and may therefore require closer examination.

The flag is not a definitive assessment of a company’s creditworthiness, solvency or future performance. The underlying financial statements and the company’s individual circumstances should always be considered.
Requires confirmation

To reduce the influence of isolated factors—such as temporary fluctuations, one-off accounting effects, reporting delays, estimation inaccuracies or restructuring events—the flag is displayed only when at least two of three financial distress indicators are triggered.

Financial distress indicators

A single triggered indicator is not sufficient to display the flag.

Calculation rules

• The most recent available financial information is used.
• Consolidated financial statements are preferred where available.
• The most recent financial statement must not be older than four years.
• Four financial years are used to calculate revenue CAGR where available. If only three are available, those three are used. With fewer than three suitable years, revenue decline is not evaluated.
• Three suitable financial years are required to assess repeated losses.
• Estimated values are excluded, except for values classified as “estimated via LLM”.
• An indicator without sufficient information is not evaluated and does not count as triggered.
• Missing financial information alone can never trigger the flag.

Examples

The following simplified examples use anonymized companies: