How to read a company’s fundamentals in five minutes
You do not need a finance degree to judge whether a company is in good shape. Five questions, each answered by one or two numbers, cover most of what matters.
| Question | Look at | Healthy sign | Warning sign |
|---|---|---|---|
| Is it profitable on its capital? | ROCE, ROE, net margin | ROCE and ROE above 15% | ROCE below 8%, losses |
| Can it carry its debt? | Debt to equity, interest cover | D/E below 0.5, interest cover above 5x | D/E above 1.5, cover below 1.5x |
| Am I overpaying? | PE, price to book, EV/EBITDA | At or below the sector median | Far above the sector median |
| Is it growing? | Revenue and EPS growth | Both growing above 10% | Revenue shrinking |
| Can I trust the owners? | Promoter holding and pledge | Holding above 50%, no pledge | Pledge above 15% |
How DecideChart turns this into one score
The health score weighs these five areas: profitability 25%, debt and solvency 25%, valuation 20%, growth 15% and governance 15%. Each metric is scored between a weak and a strong threshold, then the pillars are combined into a number from 0 to 100. Companies scoring 70 or more are graded Healthy, 55–70 Fair, 40–55 Caution and below 40 High risk.
The score is a starting point for research, not a buy signal. A Healthy company can still be a poor investment if you pay too much for it, and a Caution company can be recovering. Always read the reasons behind the number, which every company page lists.
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DecideChart is an AI-based research tool from Akshay Lakshay Kotish Private Limited. It is not linked to SEBI, BSE or NSE and does not give investment advice. Figures come from open market data and can lag company filings.