Tykr Score
The maximum score a stock can achieve within Tykr is 100.
Most investors, if they are able to calculate the MOS, will make a buying decision (or selling decision) based on MOS alone. That may work in some cases but an investor needs to add an extra layer of rigor to the analysis. In other words, an extra layer of risk protection to truly confirm the stock is a wise or poor investment. That’s where the Tykr score comes in.
What Does a Tykr Score Mean?
The score within Tykr determines the overall financial strength of a stock. The higher the score, the safer the investment.
How are the points calculated?
ROIC: Return on invested capital (ROIC) is used to determine a company’s efficiency at allocating capital to profitable investments. The higher the score, the more effective a company is using its capital to generate returns.
Maximum points = 30
- If ROIC is equal or greater than 10%, apply 5 points.
- Calculation = ebita / (debt + equity)
- If ROIC 1 Year Past is equal or greater than 10%, apply 5 points.
- Calculation = ebita 1 year past / (debt 1 year past + equity 1 year past)
- If ROIC 2 Year Past is equal or greater than 10%, apply 5 points.
- Calculation = ebita 2 years past / (debt 2 years past + equity 2 years past)
- If ROIC 3 Year Past is equal or greater than 10%, apply 5 points.
- Calculation = ebita 3 years past / (debt 3 years past + equity 3 years past)
- If ROIC 4 Year Past is equal or greater than 10%, apply 5 points.
- Calculation = ebita 4 years past / (debt 4 years past + equity 4 years past)
- If ROIC over the past year is greater than ROIC over the past 4 years, apply 5 points.
Equity Growth Rate: Equity represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt was paid off. The higher the score, the more the company is growing its equity quarter over quarter and year over year.
Maximum points = 16
- If Equity Growth Rate of quarters 1 – 4 is 10% greater than quarters 5 – 8, apply 4 points.
- Calculation: (equity/equity1y)^(1/1)-1
- Where equity is the sum of quarters 1 – 4 and equity1y is the sum of quarters 5 – 8.
- If Equity Growth Rate of quarters 1 – 4 is 10% greater than quarters 9 – 12, apply 4 points.
- Calculation: (equity/equity2y)^(1/2)-1
- Where equity is the sum of quarters 1 – 4 and equity2y is the sum of quarters 9 – 12.
- If Equity Growth Rate of quarters 1 – 4 is 10% greater than quarters 13 – 16, apply 4 points.
- Calculation: (equity/equity3y)^(1/3)-1
- Where equity is the sum of quarters 1 – 4 and equity3y is the sum of quarters 13 – 16.
- If Equity Growth Rate of quarters 1 – 4 is greater than the Equity Growth Rate of quarters 5 – 8, apply 4 points.
EPS Growth Rate: The higher the EPS, the more profitable a company is considered. The higher the score, the more the company is increasing its EPS quarter over quarter and year over year.
Maximum points = 16
- If EPS Growth Rate of quarters 1 – 4 is 10% greater than quarters 5 – 8, apply 4 points.
- Calculation: (eps/eps1y)^(1/1)-1
- Where eps is the sum of quarters 1 – 4 and eps1y is the sum of quarters 5 – 8.
- If EPS Growth Rate of quarters 1 – 4 is 10% greater than quarters 9 – 12, apply 4 points.
- Calculation: (eps/eps2y)^(1/2)-1
- Where eps is the sum of quarters 1 – 4 and eps2y is the sum of quarters 9 – 12.
- If EPS Growth Rate of quarters 1 – 4 is 10% greater than quarters 13 – 16, apply 4 points.
- Calculation: (eps/eps3y)^(1/3)-1
- Where eps is the sum of quarters 1 – 4 and eps3y is the sum of quarters 13 – 16.
- If EPS Growth Rate of quarters 1 – 4 is greater than the EPS Growth Rate of quarters 5 – 8, apply 4 points.
Sales Growth Rate: Sales represent the revenue of the company. The higher the score, the more the company is increasing its revenue quarter over quarter and year over year.
Maximum points = 16
- If Sales Growth Rate of quarters 1 – 4 is 10% greater than quarters 5 – 8, apply 4 points.
- Calculation: (sales/sales1y)^(1/1)-1
- Where sales is the sum of quarters 1 – 4 and sales1y is the sum of quarters 5 – 8.
- If Sales Growth Rate of quarters 1 – 4 is 10% greater than quarters 9 – 12, apply 4 points.
- Calculation: (sales/sales2y)^(1/2)-1
- Where sales is the sum of quarters 1 – 4 and sales2y is the sum of quarters 9 – 12.
- If Sales Growth Rate of quarters 1 – 4 is 10% greater than quarters 13 – 16, apply 4 points.
- Calculation: (sales/sales3y)^(1/3)-1
- Where sales is the sum of quarters 1 – 4 and sales3y is the sum of quarters 13 – 16.
- If Sales Growth Rate of quarters 1 – 4 is greater than the Sales Growth Rate of quarters 5 – 8, apply 4 points.
Cash Growth Rate: Cash is the cash that a business has available. A business with more cash available is going to be better prepared for economic downturns. The higher the score, the more the company is increasing it’s available cash quarter over quarter and year over year.
Maximum points = 16
- If Cash Growth Rate of quarters 1 – 4 is 10% greater than quarters 5 – 8, apply 4 points.
- Calculation: (cash/cash1y)^(1/1)-1
- Where cash is the sum of quarters 1 – 4 and cash1y is the sum of quarters 5 – 8.
- If Cash Growth Rate of quarters 1 – 4 is 10% greater than quarters 9 – 12, apply 4 points.
- Calculation: (cash/cash2y)^(1/2)-1
- Where cash is the sum of quarters 1 – 4 and cash2y is the sum of quarters 9 – 12.
- If Cash Growth Rate of quarters 1 – 4 is 10% greater than quarters 13 – 16, apply 4 points.
- Calculation: (cash/cash3y)^(1/3)-1
- Where cash is the sum of quarters 1 – 4 and cash3y is the sum of quarters 13 – 16.
- If Cash Growth Rate of quarters 1 – 4 is greater than the Cash Growth Rate of quarters 5 – 8, apply 4 points.
Calculation Overview
- ROIC maximum = 30 points
- Equity maximum = 16 points
- EPS maximum = 16 points
- Sales maximum = 16 points
- Cash maximum = 16 points
Total points = 94
Since the maximum points total 94, we then apply a percentage. For example, let’s say MSFT (Microsoft) totals 85 points. 85/94 = 90%.
We then convert the percentage back to points.
90% = 90 points.
In this circumstance, the score for MSFT in Tykr will display as 90/100.