Chime Financial, Inc.

• ✕ ProfitableReturn on assets above zero failed
• ✓ Cash from operationsOperating cash flow above zero passed
• ✕ Profitability improvedReturn on assets higher than a year before failed
• ✓ Profit backed by cashOperating cash flow above net income (low accruals) passed
• – Less long-term debtLong-term debt as a share of assets fell — not reported no data
• ✓ More liquidCurrent ratio higher than a year before passed
• ✓ No new sharesShare count did not grow passed
• ✓ Better gross marginGross margin higher than a year before passed
• ✕ Sells more per assetAsset turnover higher than a year before failed

Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.

• Working capital ÷ assets 0.70 × 6.56+4.57
• Retained earnings ÷ assets -1.72 × 3.26-5.60
• Operating income ÷ assets -0.53 × 6.72-3.56
• Equity ÷ liabilities 2.49 × 1.05+2.61

Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.

• Receivables vs sales 0.91+0.84
• Gross margin slipping 1.00+0.53
• Soft assets 1.00 (not reported, set to 1)+0.40
• Sales growth 1.31+1.17
• Slower depreciation 1.00 (not reported, set to 1)+0.12
• Overheads vs sales 2.21-0.38
• Profit not in cash -0.54-2.53
• Leverage rising 0.77-0.25

Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.