Fulmer H-Score
Calculates the Fulmer H-Score, a financial metric used to predict the likelihood of a company going bankrupt. Unlike the Altman Z-Score, which was built on relatively large, listed manufacturing companies, the Fulmer H-Score was calibrated on a matched-pair sample of small, failed and non-failed U.S. companies, using nine financial ratios selected via step-wise multiple discriminant analysis.
The formula is as follows:
\[V_{1} = \text{Retained Earnings} / \text{Total Assets}\] \[V_{2} = \text{Revenue} / \text{Total Assets}\] \[V_{3} = \text{Income Before Tax} (\text{EBT}) / \text{Total Equity}\] \[V_{4} = \text{Operating Cash Flow} / \text{Total Liabilities}\] \[V_{5} = \text{Total Debt} / \text{Total Assets}\] \[V_{6} = \text{Total Current Liabilities} / \text{Total Assets}\] \[V_{7} = \ln(\text{Total Assets} - \text{Goodwill and Intangible Assets})\] \[V_{8} = (\text{Total Current Assets} - \text{Total Current Liabilities}) / \text{Total Liabilities}\] \[V_{9} = \ln(\text{EBIT} / \text{Interest Expense}),\;\; \text{with EBIT the reported Operating Income}\] \[\text{H-Score} = 5.528 \cdot V_{1} + 0.212 \cdot V_{2} + 0.073 \cdot V_{3} + 1.270 \cdot V_{4} - 0.120 \cdot V_{5} + 2.335 \cdot V_{6} + 0.575 \cdot V_{7} + 1.083 \cdot V_{8} + 0.894 \cdot V_{9} - 6.075\]With trailing, the flows are summed and the balance sheet items averaged over the trailing periods.
The Fulmer H-Score can be interpreted as follows:
- An H-Score of less than 0 predicts failure.
- An H-Score of greater than 0 predicts non-failure.
Also known as: Fulmer H-Score, H factor, bankruptcy prediction, financial distress score.
Fulmer H-Score in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_fulmer_h_score as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["DIS", "FOXA", "CMCSA"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.models.get_fulmer_h_score().xs("Fulmer H-Score", level=1)
Or, after setting up the Finance Toolkit MCP, ask:
What was the Fulmer H-Score of Disney, Fox and Comcast from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| CMCSA | 11.6317 | 11.6248 | 11.7028 | 11.8104 | 11.9431 |
| DIS | 10.8945 | 11.5241 | 12.0105 | 12.4096 | 12.7101 |
| FOXA | 10.9776 | 11.0388 | 10.9996 | 11.0274 | 11.8441 |
Parameters
get_fulmer_h_score accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | The number of decimals to round the results to. Defaults to None. | 2 |
growth | bool | Whether to calculate the growth of the values. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | None | The trailing period to use for the calculation. Defaults to None, which is 4 on quarterly data (a trailing twelve months), as the score was estimated on yearly statements. | 4 |
show_columns | list[str] | None | List of columns to show in the results. If None, all columns will be shown. Defaults to None. | ["Debt to Total Assets", "Fulmer H-Score"] |