[UseofWeapons1]

The easist method is by trend in employee count. If headcount is rising, that's a good indicator, if it's falling, that's generally bad. Stable can be perfectly fine, or bad, depending on the company. You may have concerns about the magnitude of growth, or claim lay-offs were justified or turnover is natural, but the trend generally holds.

You should also pay attention to other employees; ask yourself why folks who leave are leaving. This seems easy, but I know one start-up well where a small trickle of occasional high-level departures turned into an eventual flood and bankruptcy.

Beyond that, it's the usual. Anything you can tell about sales growth, competitive intensity, leadership, etc. are all helpful and good data points.

[blowski]

Rising headcount is not necessarily a good sign. To the contrary, it's often a sign that the company is haemorrhaging cash, hoping that if they hire enough staff something magic will happen before time runs out.

[le-mark]

There's also the idea that head count can signal revenue, or expected revenue. Companies looking to be bought can go on hiring sprees to appear more healthier to potential buyers. I experienced this at one company, when the new owner installed their CEO, the first thing he did was slash head count.

[honestoHeminway]

Head Count growing exponential is usually a warning sign for tech-debt.