One of the five Investor's Business Daily SmartSelect® Corporate Ratings, this data item combines into one simple A to E rating (an 'A' rating is the highest mark and represents the top 20 percent of all stocks) four fundamental factors used by analysts: sales growth rate over the last three quarters, pre-tax profit margins, after-tax profit margins, and return on equity (ROE). Sales growth and after-tax margins are computed with quarterly figures, while return on equity and pre-tax margins are computed with annual figures. All four factors take into account acceleration (rate of increase).
- A = Top 20% (Outperforming over 80% of all other stocks)
- B = Next 20% (Outperforming 60% of all other stocks)
- C = Next 20% (Outperforming 40% of all other stocks)
- D = Next 20% (Outperforming 20% of all other stocks)
- E = Bottom 20% (Outperformed by over 80% of all other stocks)