Performance Analysis – H-Score shows route to health

Several leading accountancy firms are evaluating a new method for assessing the health of companies, based on computer-aided analyses of their published accounts.

Founded by two chartered accountants, a programmer and a mathematician, London-based Company Watch has been marketing its service since February.

Company Watch combines Excel-based analytical tools and regularly updated data on 125,000 companies to help accountants, analysts and bankers evaluate their performance in their sector.

It compares seven factors, from profitability to asset-related issues such as liquidity, with an analysis of how the company handles its funding.

The result is the H-Score, a compound number derived from the performance of similar companies to the one analysed.

Company Watch chief executive Guenter Steinitz said: ‘The program is interactive, so the user can see what impact different strategies would have on the H-Score.’

He said even a company’s auditor would pick up new insights using the method.

The basic licence fee per user is £6,000 a year plus £350 a month for data updates.

Related reading