Balance-Sheet Resilience Score

Install and import#

bash

npm install fintech-algorithms

import { balanceSheetResilienceScore } from "fintech-algorithms/fundamental-analysis-and-valuation/integrated-equity-scoring/balance-sheet-resilience-score";

Signature#

balanceSheetResilienceScore(data)

Scores balance-sheet resilience from the current ratio, net debt against four times EBITDA, EBITDA interest coverage, and the share of debt not maturing within twelve months, each clamped and weighted into one score.

Parameters#

Name	Type	Notes
`data`	`{ current_assets: number; current_liabilities: number; total_debt: number; ebitda: number; interest_expense: number; cash_and_equivalents: number; debt_due_12m: number }`	`current_assets`, `current_liabilities`, `total_debt`, `ebitda` and `interest_expense` must be positive; `cash_and_equivalents` and `debt_due_12m` must not be negative, and `debt_due_12m` may not exceed `total_debt`.

Returns#

{ state: string; method: string; components: { liquidity: number; net_leverage: number; interest_coverage: number; maturity_headroom: number }; weights: Record<string, number>; contributions: Record<string, number>; balance_sheet_resilience_score: number; band: string }

components holds the four measures each clamped to 0 to 100, weights gives 0.3 each to liquidity and net_leverage, 0.25 to interest_coverage and 0.15 to maturity_headroom, contributions is each component times its weight, and balance_sheet_resilience_score is their sum. band is strong at 75 or above, watch at 50 or above, otherwise weak.

Errors#

When any of the seven inputs is not a finite number — throws TypeError
When current_assets, current_liabilities, total_debt, ebitda or interest_expense is not positive — throws RangeError
When cash_and_equivalents or debt_due_12m is negative — throws RangeError
When debt_due_12m exceeds total_debt — throws RangeError

Complexity: time O(1), space O(1).

Worked example#

executed Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

Input#

data

{
  "current_assets": 500,
  "current_liabilities": 250,
  "total_debt": 400,
  "ebitda": 160,
  "interest_expense": 32,
  "cash_and_equivalents": 120,
  "debt_due_12m": 80
}

Call#

balanceSheetResilienceScore(data)

Returns#

object with 7 fields: state, method, components, weights, contributions, balance_sheet_resilience_score, band

{
  "state": "calculated",
  "method": "liquidity-leverage-coverage-maturity-resilience",
  "components": {
    "liquidity": 100,
    "net_leverage": 56.25,
    "interest_coverage": 50,
    "maturity_headroom": 80
  },
  "weights": {
    "liquidity": 0.3,
    "net_leverage": 0.3,
    "interest_coverage": 0.25,
    "maturity_headroom": 0.15
  },
  "contributions": {
    "liquidity": 30,
    "net_leverage": 16.875,
    "interest_coverage": 12.5,
    "maturity_headroom": 12
  },
  "balance_sheet_resilience_score": 71.375,
  "band": "watch"
}

Other exports#

This module also exports calculate, pointInTimeStockScoringInputAssembly, stockScoringPeerCohortResolver, fundamentalMetricDirectionAndPeerNormalization, modelApplicabilityAndVariantRouter, accountingFinancialHealthComposite, earningsQualityComposite, dividendSafetyScore, distressModelEnsemble, crossModelConflictAndDoubleCountingResolver, overallExplainableStockScore, scoreConfidenceMissingDataPenaltyAndAbstention, marketWideStockScreeningAndRanking, stockScoreHistoryMigrationAndChangeAttribution. Every module additionally exports run as an alias of its primary function, and a meta object carrying its catalog id, domain, family, shape and article URL.