DeepScreen 13-factor methodology

The model combines valuation, growth, capital efficiency, leverage and shareholder distribution. PEG and ROCE receive the strongest weights; no single factor determines the verdict.

1. Factor 1

   P/E — Price-to-Earnings Ratio

   P/E shows how much investors pay for one unit of annual earnings. Compare it with close sector peers and the company's own history, not with the whole market.

2. Factor 2

   PEG — Price/Earnings-to-Growth Ratio

   PEG relates a company's earnings multiple to its growth rate. A reading near 1 is often considered balanced, but growth quality and durability matter more than a single threshold.

3. Factor 3

   P/S — Price-to-Sales Ratio

   P/S values a company against revenue and is useful when earnings are small or negative. It must be read with margins because sales without profit can destroy value.

4. Factor 4

   P/B — Price-to-Book Ratio

   P/B compares market value with accounting net assets. It is most useful for banks and asset-heavy companies and less useful for software or brands whose assets are not fully recorded.

5. Factor 5

   EV/Revenue — Enterprise Value to Revenue

   EV/Revenue values operations while accounting for debt and cash. It helps compare companies with different financing, especially before profits become stable.

6. Factor 6

   EV/EBITDA — Enterprise Value to EBITDA

   EV/EBITDA compares enterprise value with EBITDA, an operating-profit measure before interest, tax, depreciation and amortisation. The multiple is conventionally interpreted only when EBITDA and enterprise value produce a positive ratio.

7. Factor 7

   ROE — Return on Equity

   ROE measures profit generated from shareholder capital. High ROE is strongest when it is consistent and not created by excessive debt.

8. Factor 8

   ROA — Return on Assets

   ROA measures how efficiently a company turns assets into profit. Asset-light and asset-heavy sectors naturally have different normal ranges.

9. Factor 9

   ROCE — Return on Capital Employed

   ROCE measures operating returns from both equity and debt capital. It is a useful quality signal for comparing companies with different leverage.

10. Factor 10

    D/E — Debt-to-Equity Ratio

    Debt-to-equity measures financial leverage. A lower value usually means a more conservative balance sheet, but normal leverage varies sharply by industry.

11. Factor 11

    LT D/E — Long-Term Debt to Equity

    Long-term debt to equity isolates structural borrowing and helps show how much enduring leverage supports the business.

12. Factor 12

    Payout — Dividend Payout Ratio

    The payout ratio shows how much profit is distributed as dividends. A sustainable payout leaves enough cash to maintain the business and fund growth.

13. Factor 13

    Operating leverage — Operating Leverage

    Operating leverage shows how strongly operating profit responds to sales. High fixed costs can amplify both growth and downturns.