Circle Internet Group, Inc.

• – ProfitableReturn on assets above zero — not reported no data
• ✓ Cash from operationsOperating cash flow above zero passed
• – Profitability improvedReturn on assets higher than a year before — not reported no data
• ✓ 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 — not reported no data
• – No new sharesShare count did not grow — not reported no data
• – Better gross marginGross margin higher than a year before — not reported no data
• – Sells more per assetAsset turnover higher than a year before — not reported no data

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 0.03 × 6.56+0.21
• Retained earnings ÷ assets -0.02 × 3.26-0.05
• Operating income ÷ assets -0.00 × 6.72-0.01
• Equity ÷ liabilities 0.04 × 1.05+0.05

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.

The accounts lack too many of the lines it needs.