State of health

State of health (SoH) is a figure of merit of the condition of a battery (or a cell, or a battery pack), compared to its ideal conditions. The units of SoH are percent points (100% = the battery's conditions match the battery's specifications).
Typically, a battery's SoH will be 100% at the time of manufacture and will decrease over time and use. However, a battery's performance at the time of manufacture may not meet its specifications, in which case its initial SoH will be less than 100%.
SoH evaluation.
Knowing the SoH of a given battery and the SoH threshold of a given application:
Parameters.
As SoH does not correspond to a particular physical quality, there is no consensus in the industry on how SoH should be determined.
The designer of a battery management system may use any of the following parameters (singly or in combination) to derive an arbitrary value for the SoH.
In addition, the designer of the battery management system defines an arbitrary weight for each of the parameter's contribution to the SoH value. The definition of how SoH is evaluated can be a trade secret.
SOH threshold.
As stated before, the method by which the battery management system evaluates the SoH of a battery is arbitrary.
Similarly, the SoH threshold below which an application deems a particular battery unsuitable is also arbitrary; a given application may accept a battery with a SoH of 50% and above, while a more critical application may only accept batteries with a SoH of 90% and above. Typically this relates to instantaneous drops in the supplied voltage, and subsequent inability for the connected power electronics to operate normally.