How are indicators and scores calculated?
GPRV is built according to the following process:
Step 1: Calculation of the absolute values of the GPRV indicators
Financial indicators are calculated for all companies covered in a consistent manner, thus ensuring relevant comparison.
Step 2: Conversion of absolute values into scores
To convert an absolute value of an indicator to a score, it is necessary to define a reference universe. By default, GPRV sets the reference universe to all worldwide stocks that belong to the selected company's sector. GPRV scores are computed relative to the reference universe. The calculated score ranges from 0 to 10 depending on how the absolute value ranks among the universe. A low score indicates that the selected company’s indicator value is lower than those of most other companies within the universe. Conversely a high score is a sign of greater attractiveness. Although the scoring is relative for most indicators, some indicators have an absolute scoring (that is, the score depends on a fixed range). For example, a beta of 1 will get a score of 5 (the median value) and a beta of 0.6 will get a score of 9.
