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Health Ratios

The most important aspect of Stock Doctor is the unique Financial Health methodology used to analyse each company’s Balance Sheet, Cash Flow and Profit and Loss statements. Dr Merv Lincoln’s academically proven methodology, developed after years of industry research and covering three economic cycles, is also widely used by corporate Australia in the area of risk management.

You can access the 'Health Ratios' page from a companies '9 Golden Rules Screen' by clicking on the 'Heart Rate' icon.


Lincoln’s methodology, derived from Dr Merv Lincoln’s PhD thesis, uses a multivariate approach, whereby a unique set of financial ratios are calculated, combined and weighted to produce an insolvency risk score representing the overall Financial Health of a company.

Dr Merv Lincoln selected these ratios after analysing thousands of failed and successful companies, to separate low risk companies from high risk companies and isolate indicators of potential failure.

For more information on the Financial Health ratios, please refer to Health Ratios