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Size score

The value of the Size score tries to be a reflection of the company dimension based on different measurement criteria.

How to use the score

The value of this score allows to classify the company according to its size using the following table as reference:

Score value range Interpretation
from 0 to 5 Small company
from 5 to 7 Medium company
from 7 to 10 Large company

Criteria for the score calculation

There are many criteria that can be used to measure the size of the company. Each of these criteria measures partial aspects of the business dimension. The relevance of each criterion will depend on the type of company, sector of activity and degree of capitalization of the company.

Gradement uses a combination of the following criteria as a proxy for the company size:

  • Sales volume, measured in monetary units
  • Assets
  • Market capitalization of the company
  • The number of employees

Considerations about the company size

In general, when comparing two companies under equal conditions, will be preferable from the investor point of view the one that presents a larger size. The large dimension allows the company:

  • The division of labor/knowledge and the specialization of workers and managers
  • Integration of productive processes through the use of multipurpose equipment (robotics, automation, etc.)
  • Achieving economies of scale
  • Possibility of using a great diversity of structural and organizational models
  • Greater ease of access to external financing with lower financial costs

However, in certain situations, it could be considered that the small company has certain advantages compared to the large one, since in large companies is more frequent:

  • The greater tendency for bureaucracy in all the company processes
  • Reduced maneuverability in the face of strategic changes
  • In general, less contact and closeness to the customer