Comprehensive Financial Quality Factor
factor.formula
Single quarter income tax expense / single quarter operating income
A measure of a company's tax burden relative to its profitability. The higher the ratio, the higher the company's income tax burden per unit of revenue, which may reflect lower earnings quality or a more conservative tax strategy.
Single quarter operating expenses / Single quarter operating income
Measures the operating expenses paid by a company for each unit of revenue. The higher the ratio, the higher the company's investment in sales, management, and R&D, which may affect profitability. At the same time, the changing trend of this ratio can reflect the changes in the company's cost control efficiency.
Year-on-year increase in accounts receivable turnover
Measures the change in the company's accounts receivable collection efficiency compared to the same period last year. A positive value indicates an improvement in accounts receivable turnover efficiency, indicating that the company's sales collection ability has increased or its credit policy has tightened; a negative value indicates a decrease in accounts receivable turnover efficiency, which may indicate a weakening of sales collection ability or a loosening of credit policy.
(Single quarter income tax expense / single quarter operating income) year-on-year increase
Measures the year-on-year change in the ratio of a company's tax burden to profitability. A positive value indicates a year-on-year increase in the ratio, which may indicate a decline in earnings quality or a more conservative tax strategy; a negative value indicates a year-on-year decrease in the ratio, which may indicate an improvement in earnings quality or a more aggressive tax strategy.
Indicator Description:
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The income tax expense that a company should pay in a single quarter. This indicator directly reflects the company's tax burden level.
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The total amount of revenue a company earns from selling goods or providing services in a single quarter. This indicator is an important basis for measuring a company's business scale and market performance.
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The various expenses incurred by a company in a single quarter to maintain daily operations, including sales expenses, administrative expenses, and research and development expenses.
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An indicator that measures the efficiency of a company's accounts receivable management. The calculation formula is: operating income / average accounts receivable balance. The higher the indicator, the higher the company's accounts receivable collection efficiency.
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Refers to the difference between the current value and the value of the same period last year.
factor.explanation
The comprehensive financial quality factor aims to quantitatively assess the financial health of a company by examining multiple dimensions such as profitability, cost control, accounts receivable management, and tax burden. This factor uses percentile and cross-sectional standardization to effectively eliminate the impact of different industries and company sizes, thereby enhancing the comparability between different companies. The higher the factor value, the better the company's financial quality is, the lower the risk is, and the higher the investment value may be. This factor can be used in multiple aspects such as quantitative stock selection, risk assessment, and industry research. It should be noted that a single factor cannot fully represent the overall situation of a company and needs to be considered in combination with other factors.