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Financial Health - White Paper

A firm foundation for confident and informed investment decisions

Throughout the history of Australia’s Stock Exchange, there have been hundreds of corporate failures, both big and small. Currently, more than 70% of all ASX-listed companies are displaying poor levels of Financial Health, which is a vital consideration for any successful long-term investment portfolio.

So how do investors identify Financially Healthy, high-quality businesses and protect themselves from potential disaster?

Lincoln Indicators' proprietary Financial Health Model is the backbone of our investment methodology which has been helping Australian investors experience solid long-term returns for more than 25 years.

Developed in the 1980s by Lincoln Indicators Co-Founder Dr Merv Lincoln, our Financial Health Model applies a unique combination of 14 key accounting ratios to determine a company's Financial Health Score.

And while today the process around Financial Health may have evolved since the 1980s, the focus remains the same: a data-driven objective analysis of a company's financials. This helps provide investors with objective and quantitative research that cuts through market commentary, speculation and noise.

In this white paper, we share:

  • how the Financial Health Model works
  • Financial Health in practice, to help construct a strong sharemarket portfolio and avoid corporate failures
  • how Stock Doctor helps investors utilise Financial Health easily with their research and stock selection strategies

Download White Paper