UPST
Is Upstart Holdings, Inc. (UPST) financially healthy?
Upstart Holdings, Inc. (UPST)'s balance sheet currently shows net-debt-to-EBITDA of 14.24x, debt-to-equity of 2.70x, and a current ratio of 4.03. Financial health on the Buffett-Fit framework asks whether a bad year would force the business to issue equity, sell assets at the wrong time, or cut the dividend. The full breakdown is below. Educational only, not investment advice.
Debt position. Upstart Holdings, Inc. carries net-debt-to-EBITDA of 14.24x and a debt-to-equity ratio of 2.70x. Buffett's rough rule for non-financial businesses: net-debt-to-EBITDA below 2x in most sectors, with utilities and REITs allowed more room because their cash flows are more predictable. Above 3-4x is where forced deleveraging in a downturn becomes a real risk.
Liquidity. Current ratio (current assets / current liabilities) sits at 4.03. Below 1.0 means the business doesn't have enough short-term assets to cover short-term obligations - Graham's defensive cut-off is 2.0, but most healthy modern businesses run 1.2-1.8 because working-capital efficiency has improved over the decades. The key is the direction over time, not the absolute number.
Cash-flow quality. Interest coverage runs at 1.4x, and the FCF-to-net-income ratio is -3.10x. The first tells you whether earnings comfortably cover debt service; the second tells you whether accounting earnings are showing up as cash. Both above 1.5x is the comfortable zone - below 1.0x is where Buffett would walk away regardless of how cheap the stock looks.
How invest-like measures this
Financial health on invest-like measures whether a balance sheet is robust enough that a bad year won't force the business to issue equity, sell assets at the wrong time, or cut the dividend. Three quantitative anchors: net-debt-to-EBITDA below the sector median (less than 2x in most cases), free-cash-flow margin above 10% with limited working-capital noise, and interest coverage that holds up even at peak rates.
Conservative balance sheets are the single biggest determinant of which businesses survive Buffett's "this too shall pass" cycles. The pillar score weighs all three plus the FCF-to-net-income ratio (accounting earnings that don't show up as cash are a red flag).
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Educational framework analysis only. Not investment advice, not a recommendation, not personalized to your situation. Always do your own research.