Analytical & Information
The Moneycontrol Stock Score (M-score) is a score assigned to each stock based on Moneycontrol's multi-factor algorithm. The M-Score is calculated by analyzing over 35 parameters, including both current and historical financial statements, price charts, and technical indicators for each stock. The financial statements are assessed to determine the company’s financial performance, growth trends, financial strength, earnings quality, and relative valuation compared to its peers. The strength of the stock’s price charts, as indicated by technical factors, is also considered. The algorithm then assigns a weighted score out of 100 for each stock.
The M-Score is built around a four-factor model, which includes the following:
1.Q-Factor
Each company receives a Q-Factor score out of 100. The Q-Factor measures the financial strength, earnings quality, and sustainability of the company’s earnings.
- Net Profit Margin Stability
- Debt-to-Equity Ratio (D/E) vs Industry Average
- Cash Flow from Operations (CFO)
- Promoter & Institutional Holdings
2.G-Factor
Each company receives a G-Factor score out of 100. The G-Factor evaluates the company’s financial performance and growth trends.
- Sales Growth
- EBITDA Growth
- Gross Block Growth
- Return on Equity (ROE)
3.V-Factor
Each company receives a V-Factor score out of 100. The V-Factor measures how the market values the company relative to its industry peers.
- Price-to-Earnings (P/E) Ratio
- Price-to-Book (P/B) Ratio
- Dividend Yields
4.T-Factor
Each company receives a T-Factor score out of 100. The T-Factor assesses the company’s technical strength, as shown by indicators and price charts.
5.Red Flags
While not directly influencing the score, the Red Flags highlight certain financial parameters, alerting the user of possible risks.