Quality Rating

# Quality Rating

The Quality Rating measures company excellence on a scale of 0-100, combining financial strength, earnings predictability, relative growth, and profitability.


## Key Points

- **Quality Rating**: 0-100 score measuring company excellence
- **80+ is Excellent**: Top 20% of companies (blue color coding)
- **65-80 is Good**: Next 20% of companies (green color coding)
- **Below 35 is Poor**: Generally avoid these companies (red color coding)
- **Four Equal Components**: Financial strength, earnings predictability, relative growth, relative profitability

## The Basics

Quality separates excellent companies from mediocre ones. The Quality Rating scores companies on four equally-weighted factors, each contributing 25 points to the total 100-point scale. This creates an objective measure of company excellence that you can compare across industries and market sectors.

The rating uses a percentile ranking system. A Quality Rating of 80 means the company ranks in the top 20% of all companies we track. This makes it easy to identify which companies deserve your attention and which ones to avoid.

### Quality Rating Scale

| Rating Range | Quality Level | Color Code | Action |
|--------------|---------------|------------|--------|
| 80-100 | Excellent | Blue | Preferred investments |
| 65-80 | Good | Green | Acceptable for portfolios |
| 35-65 | Average | Black | Proceed with caution |
| 0-35 | Poor | Red | Generally avoid |

### The Four Components (25 points each)

1. **Financial Strength**: Balance sheet health and financial stability (0-100%)
2. **Earnings Predictability**: Consistency of earnings trends over time (0-100)
3. **Relative Growth**: Company's projected sales growth versus industry average
4. **Relative Profitability**: Company's projected profit margins versus industry average

## On the Platform

You'll see Quality Ratings prominently displayed throughout Manifest Investing:

- **Stock Reports**: Quality Rating appears at the top of every company analysis
- **Dashboards**: Quality column shows ratings with color coding
- **Stock Lists**: Sort by Quality to find the highest-rated companies
- **Portfolio Tracking**: Monitor the average Quality Rating of your holdings

The color coding makes it easy to spot quality at a glance:
- **Blue numbers (80+)**: Excellent companies worth investigating
- **Green numbers (65-80)**: Good companies that meet our standards
- **Red numbers (below 35)**: Poor companies to avoid

### Why Quality Comes First

Benjamin Graham taught that excellent companies trade at reasonable valuations over time. Poor companies might look cheap today but often become expensive when problems emerge. By checking Quality Rating first, you avoid companies likely to disappoint.

## Learn More

- [PAR (Projected Annual Return)](/guide/core-concepts/par) - Learn how to evaluate return potential
- [Sweet Spot Investing](/guide/core-concepts/sweet-spot) - Combine quality with attractive returns
- [Company Analysis](/guide/getting-started/reading-company-page) - Deep dive into individual companies
- [Portfolio Management](/guide/making-decisions/portfolio-design) - Track quality across your holdings