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:

H-Score = 5.528 * V1 + 0.212 * V2 + 0.073 * V3 + 1.270 * V4 - 0.120 * V5 + 2.335 * V6 + 0.575 * V7 + 1.083 * V8 + 0.894 * V9 - 6.075

The nine variables are:

V1: Retained Earnings to Total Assets
V2: Sales to Total Assets
V3: EBT to Total Equity
V4: Cash Flow (Operating Cash Flow) to Total Liabilities
V5: Total Debt to Total Assets
V6: Current Liabilities to Total Assets
V7: Log of Tangible Total Assets (Total Assets less Goodwill and Intangible Assets)
V8: Working Capital to Total Liabilities
V9: Log of EBIT to Interest Expense

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.

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Calculate the Fulmer H-Score in Python

The Fulmer H-Score is available in the Models module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_fulmer_h_score as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "MSFT"], api_key="FINANCIAL_MODELING_PREP_KEY")

toolkit.models.get_fulmer_h_score().loc["AAPL"]

Which returns:

	2021	2022
Retained Earnings to Total Assets	0.0158	-0.0087
Sales to Total Assets	1.0422	1.1179
EBT to Total Equity	1.731	2.3505
Cash Flow to Total Liabilities	0.3614	0.4044
Debt to Total Assets	0.3889	0.3756
Current Liabilities to Total Assets	0.3575	0.4365
Log of Tangible Total Assets	26.5841	26.589
Working Capital to Total Liabilities	0.0325	-0.0615
Log of EBIT to Interest Expense	3.7445	3.729
Fulmer H-Score	14.2755	14.329

Parameters

get_fulmer_h_score accepts the following parameters:

rounding (int, optional): The number of decimals to round the results to. Defaults to None.
growth (bool, optional): Whether to calculate the growth of the values. Defaults to False.
lag (int | list[int], optional): The lag to use for the growth calculation. Defaults to 1.
standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
trailing (int | None, optional): The trailing period to use for the calculation. Defaults to None.
show_columns (list[str] | None, optional): List of columns to show in the results. If None, all columns will be shown. Defaults to None.

The Models module page introduces the module, and the sidebar lists all of its functions.

Calculate the Fulmer H-Score in Python

Parameters

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