Financial Health White Paper

Tim Lincoln
Written by

Tim Lincoln

Co-Founder and
Managing Director

Jan 17th, 2022
Related topics
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A firm foundation for confident and informed investment decisions

Throughout the history of Australia’s Stock Exchange, there have been hundreds of corporate failures, both big and small. Currently, more than 70% of all ASX-listed companies are displaying poor levels of Financial Health, which is a vital consideration for any successful long-term investment portfolio. So how do investors identify Financially Healthy, high-quality businesses and protect themselves from potential disaster?

Lincoln Indicators’ proprietary Financial Health Model is the backbone of our investment methodology which has been helping Australian investors experience solid long-term returns for more than 25 years.

Developed in the 1980s by Lincoln Indicators’ Co-Founder Dr Merv Lincoln, our Financial Health Model applies a unique combination of 14 key accounting ratios to determine a company’s Financial Health Score.

And while today the process around Financial Health may have evolved since the 1980s, the focus remains the same: a data-driven objective analysis of a company’s financials. This helps provide investors with objective and quantitative research that cuts through market commentary, speculation and noise.

In this white paper, we share:

  • how the Financial Health Model works
  • Financial Health in practice, to help construct a strong sharemarket portfolio and avoid corporate failures
  • how Stock Doctor helps investors utilise Financial Health easily with their research and stock selection strategies
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Information in this communication is current as of publication unless otherwise stated. It is provided for educational purposes only and may not reflect current market data or opinion. It should not be relied upon in respect to any current investment decision. Investments can go up and down. Past performance is not a reliable indicator of future performance.

Important: This communication is issued by Lincoln Indicators Pty Ltd (Lincoln) ABN 23 006 715 573, as Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167. This communication may contain general financial product advice or forward-looking statements regarding our intent, belief or current expectations with respect to the market conditions. Caution is advised to place undue reliance on these forward-looking statements, as our advice has been prepared without taking account of your personal circumstances. Therefore, you should consider its appropriateness, in light of your objectives, financial situation and needs, before acting on it. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making a decision. Please refer to our Important Information and Financial Services Guide (FSG) for more information at . If our advice relates to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement (PDS) at before making any decision.

Lincoln, Lincoln Financial Group Pty Ltd, any directors, employees and agents of these entities, make no representation and give no warranty as to the accuracy of this communication and do not accept any responsibility for any errors or inaccuracies in or omissions from this communication (whether negligent or otherwise) and shall not be liable for any loss or damage howsoever arising as a result of any person acting or refraining from acting in reliance on any information contained herein. No reader should rely on this communication as it does not purport to be comprehensive. This disclaimer does not purport to exclude any rights under, or warranties implied by, law which may not be lawfully excluded.

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All financial services are provided by Lincoln Indicators Pty Ltd ABN 23 006 715 573 (Lincoln) as the Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167.