The gmt-score is a company's main score. It summarizes, in a single value, its profitability, solvency and price. Its value is calculated as a non-linear combination of the other scores associated with the company.
A high gmt-score value is an indication of a company with a high score in all categories of solvency, profitability, price and stability of cash flows and free earnings. On the other hand, a low grade value will be an indication of a low score in any of the above categories.
How to use the score
Only companies with
gmt-score ≥ 7 are considered by Gradement to be excellent companies from a quantitative financial, and economic point of view.
Gradement calculates the value of this score as a non-linear combination of the scores that measure the dynamic solvency, the price/free cash flow, and the economic and financial profitability scores of the company.
The steadiness scores of the free cash flow and the company's free earnings are also taken into account in their calculation, so that the higher the steadiness scores, the higher the company gmt-score will be.