The process · Step 2 of 6
Stop-or-go check
Are there hard exclusion criteria?
Why this step
Unlike the financial traffic-light in step 3, this step does not look for ranges but for binary exclusion criteria. Each of the seven criteria is weighted so that its presence alone is enough for exclusion or a temporary watchlist rating — regardless of how convincing other aspects of the story seem.
The seven exclusion criteria
- Going-concern qualification in the auditor's opinion.
- Short-term, unexplained change of auditor before a financial release.
- Repeated capital increases without recognisable operating progress.
- Ongoing investigation, lawsuit or regulatory measure with material relevance.
- Announced or ongoing delisting.
- Conspicuously frequent, unexplained changes on the board or in management.
- Gross mismatch between market capitalisation and operating business.
Result
A single applicable criterion is enough for exclusion or a temporary watchlist rating with a clear review date.
Typical mistakes
- Trying to 'offset' an applicable criterion with other positive factors.
- Checking exclusion criteria only at the review date and not tracking them further in monitoring.
- Effectively treating a temporary watchlist like a normal position.
Example logic
Example (no reference to a real company): Three capital increases in 18 months, but accompanied by clearly documented progress (new plant in operation, first revenues). Criterion 3 formally applies but is put into perspective by the progress — classified as 'watchlist with increased monitoring' rather than full exclusion.
Frequently asked questions
Is a single warning sign enough for exclusion?
Yes — the stop-or-go check is deliberately built so that a single hard criterion is sufficient.
What is the difference between 'exclusion' and 'temporary watchlist'?
An exclusion is final until the underlying fact changes. A temporary watchlist has a defined review date.
How does this step differ from the financial traffic-light?
The stop-or-go check tests binary, mostly qualitative exclusion criteria; the traffic-light rates quantitative metrics in ranges.