Army units and ships are give a star rating:

Army: Wargear, Skill, Loyalty

Navy: Systems, Skill, Loyalty

Units/ships can also take DAMAGE (i.e. lost men/squads etc. for army and hull hits for ships)

* ONE STAR: Abysmal (not up to standards)

** TWO STARS: Poor (acceptable quality, decent/unseasoned troops)

*** THREE STARS: Average (good and plentiful gear, experienced unit/crew, very dedicated).

**** FOUR STARS: Good (very good)

***** FIVE STARS: Excellent (exceptional)

(******) SIX STARS: Five stars is max, so don't expect to ever get any six star stuff :)