💡 What Is the Financial Health Score in Hedgi?
A simple number that tells you how strong your business really is.
The Financial Health Score is Hedgi’s way of helping you see the big picture — not just how much you earned or spent, but how efficiently you're running your business.
This score (0 to 100) is calculated monthly based on your income, expenses, savings, and how organized your books are. It’s like a credit score for your business operations — and it gets more accurate the more you use Hedgi.
📊 What’s Included in the Score?
The Financial Health Score combines four key areas:
1. Cash Flow Score (35%)
This measures your net income as a % of revenue — in other words, are you spending less than you earn?
Formula:
Net income ÷ Total income
Score tiers:
100 = Net income ≥ 50% of income
80 = ≥ 35%
60 = ≥ 20%
40 = ≥ 0%
0 = Negative cash flow (spending more than you earn)
2. Savings Score (30%)
This checks how much profit you kept from what you earned. If your income was $10,000 and you kept $2,000 after expenses, that’s a 20% savings rate — and a perfect score.
Formula:
Max(0, Net income) ÷ Total income
Score tiers:
100 = ≥ 20% savings
80 = ≥ 10%
50 = ≥ 5%
20 = > 0%
0 = No profit or a loss
3. Expense Ratio Score (20%)
This shows what percentage of your income you spent on business expenses.
Formula:
Expenses ÷ Income
Score tiers (lower is better):
100 = ≤ 50%
80 = ≤ 65%
60 = ≤ 80%
40 = ≤ 100%
0 = Spent more than earned
4. Categorization Score (15%)
This tracks how organized your books are. The more transactions that are categorized (manually, by rule, or by AI), the better.
Formula:
Categorized transactions ÷ Total transactions × 100
Score range:
0 to 100 (linear scale)
Even if you're not earning much yet, clean books still improve your score.
🧠Final Score Calculation
Each subscore is weighted like this:
35% Cash Flow
30% Savings
20% Expense Ratio
15% Categorization Rate
Your overall Financial Health Score =
(0.35 × Cash Flow Score + 0.30 × Savings Score + 0.20 × Expense Score + 0.15 × Categorization Score)
The result is clamped between 0 and 100, and rounded to two decimals.
📈 How to Improve Your Score
Boost your net income by increasing revenue or cutting expenses
Keep more of what you earn — aim for at least a 10–20% savings rate
Categorize all your transactions (the AI + rules will help!)
Use memos and journal entries to explain large or unclear charges
✅ Why This Score Matters
A high Financial Health Score means:
Your business is profitable
You’re operating efficiently
Your books are clean and tax-ready
You’re in a strong position to grow, apply for funding, or pass an audit
Whether you’re reviewing your numbers solo or handing them off to a CPA, this one score helps you stay on track.