The Clime Quality Rating (CQR) is consistent, rational and quantitative. Based on 70 pieces of financial data taken from a company’s accounts, the CQR separates companies on the quality of their financial fundamentals at a point in time and over time.

Each company has a unique CQR which is calculated twice a year from the audited accounts. The current as well as past CQR appears as a percentage in the Ratios page of the MyClime dashboard, while the current CQR is displayed as a 0 to 10 star rating on each valuation screen. We encourage investors to shop for companies as they would hotels, the more stars the better!

Score	Description
0 – 3 red stars	Financially weak, high probability of capital or solvency event. Avoid.
3 – 5 blue stars	Marginal financial strength, generally sub-investment grade
5 – 7 amber stars	Reasonable financial strength, possible investment grade
7 – 10 green stars	Investment grade, sound financial strength

What does CQR measure?

The CQR is based on decades of academic study. Building on the works of numerous luminaries in the field, which focussed primarily on the balance sheet, we overlay our own views on particular metrics (notably cashflow, profitability & earnings manipulation) aiming to improve the separation of the strong from the weak. A total of 45 ratios are calculated twice a year to look at the performance and solvency of the business and determine the CQR.

Download the full report on the Clime Quality Rating

The CQR is not appropriate for businesses that make money in the business of money such as banks, finance companies and insurance businesses. The risk to these businesses is not found in the P&L, Balance Sheet or Cashflow Statement.

We have excluded CQR’s for these companies as a result.