"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
Warren Buffett
The Profitability Score is a unique metric featured on Alpha Spread, aimed to offer investors an efficient way to gauge the financial health of a company in terms of its profitability.
Calculation
The Profitability Score is computed using a multi-factor algorithm that considers various financial metrics like ROE, ROIC, Revenue Growth, Net Margin, Free Cash Flow, and others. These metrics are normalized and weighted to produce a single score on a scale of 0 to 100.
Interpretation
| 0-30 | Poor profitability |
| 31-69 | Average profitability |
| 70-100 | Excellent profitability |
The Bottom Line
The Profitability Score is a robust, data-driven metric that offers an at-a-glance view of a company's profitability potential.