16-Point Stock Checklist

16-Point Stock Checklist Methodology

The 16-Point Checklist is StockScreener’s core rule-based filter designed to protect retail investors from investing in small-cap companies with poor balance sheets or corporate governance red flags.

Checklist Rules Breakdown

• Interest Coverage Ratio: Evaluates if a company generates sufficient operating profits to cover its interest payments (must be >3.0).
• Promoter Pledge Ratio: Flags companies where promoters have pledged more than 20% of their equity stake as collateral.
• Receivable Days: Tracks if the time it takes to collect cash from customers is stretching YoY, signaling potential channel stuffing.