Annual accounts are dozens of line items over several financial years. The Idonis soundness score condenses them into one grade so you know where to look first. It does not replace your own reading: on a company page, in the application, each component shows the value that produced it, its financial year and its weight. This page describes the rule as it is applied, leaving out nothing important.
What the score measures
Five figures from the latest filed financial year, each mapped onto a 0-to-1 scale between two bounds: below the lower bound the component scores 0, above the upper bound it scores 1, and in between it rises in a straight line.
- Solvency — 35%: equity ÷ total assets. 0 at 5%, full at 50%.
- Liquidity — 20%: stocks, receivables due within one year, short-term investments and cash ÷ liabilities due within one year. 0 at 0.7, full at 1.5.
- Interest coverage — 20%: operating result plus financial income ÷ financial charges. 0 at 1×, full at 6×.
- Profitability — 15%: is the result for the year positive? Yes or no.
- Leverage — 10%: debt ÷ total assets, where lower is better. 0 at 85%, full at 40%.
The score is the weighted average of these components. If one cannot be computed — a company with no financial charges has no coverage to measure — it is left out and the other weights are rescaled: a missing figure is never replaced by an assumption.
From score to reading
The score is shown out of 5. The letter follows fixed bands: A from 4, B from 3, C from 2, D from 1, E below. The word, broader, follows two thresholds: sound from 66% of the maximum, watch from 33%, fragile below. The same bounds apply to every company: the grade is absolute. Where a company stands within its sector is shown alongside, never mixed into the grade.
What caps a grade
Some published facts say something the ratios do not. They cap the grade, and the company page states which one applies and which letter the ratios alone would have given.
Apart from proceedings, these caps do not make a cautious grade worse: they prevent “sound” — and a letter above C — from being shown when a published fact stands against it. Banks and insurers, whose balance sheets do not read like those of an ordinary business, receive no score: the company page says so.
Special cases, and what they change
- Abbreviated or micro accounts. The calculation is the same, on the published items. These formats disclose less: the page shows limited confidence, with the reason. The same applies when figures were extracted from a scanned PDF, when the extracted balance sheet does not balance, or when the latest accounts are 3 years old or more.
- Companies too young. Without filed accounts there is no score. A young company (4 years at most), small, independent and loss-making, but whose equity is rising through new capital, is labelled “early stage” to put its losses in context. The grade itself does not change.
- Real estate and asset-heavy companies. For real-estate companies and companies whose tangible fixed assets are at least 80% of total assets, debt is backed by assets: the point at which the leverage component falls to 0 moves from 85% to 90%. This adjustment was checked against the history of Belgian companies.
- Holdings and groups. A holding whose financial income makes up at least 75% of the coverage base has no operating cycle: liquidity is left out. When a significant share of debt is owed to affiliated companies, solvency and leverage are read treating that debt as quasi-equity; the raw values remain shown.
Published, computed, estimated
Idonis keeps three registers apart. A published amount is as it appears in the filed accounts. A computed ratio is derived from it by a fixed formula, shown on the company page. An estimated figure — for instance a turnover that abbreviated accounts do not publish — comes from a model and carries a range and a label. The score uses only published amounts and computed ratios: no estimate goes into it.
When the grade is recomputed
The grade is recomputed as soon as a fact that makes it up changes in Idonis's data: newly filed accounts, a change of status in the register, a publication in the Gazette, a change of address. It is also recomputed on the day a filing deadline passes without a filing. It always shows the financial year it rests on: accounts closed fifteen months ago describe the company as it was fifteen months ago.
Its limits
The score is not a forecast, and it does not say whether a company will pay a given invoice. It is an automatic reading of published accounts, with their delays: it does not see events after year-end, nor what the company does not have to publish. A low grade is not a judgement on the company or its directors; a high grade does not replace the contract, guarantees or your own reading. The figures behind it are on the company page: redo the calculation, and challenge it if a figure looks wrong to you.