Credit Analysis / Manage Counterparty Risk
Do you really know the credit rating of your customers or your vendors -
or do you know your own reliability to go into negotiation with banks?
A possibility to avoid loosing money due to a short-fall of your customer is factoring. But your factoring partner will pay you for your receivables
only what the real value is (minus a margin), whatever the value is. He will and has to calculate the short-fall risk very carefully, especially for
larger amounts which could threaten his own business.
But if you have no possibility to assign a larger part of your receivables to a factoring company because the costs of the factoring are too much,
you can alternatively also figure out for yourselve what the credibility of your customer is. And, important, to manage therewith the final invoice
amount per customer. Every risk has his price between 0% and 100%. For many companies the information received from credit-rating companies
is sufficient enough, but there are two important disadvanteges:
1.
Every costumer is unique in his relationship with you. He has a personal history and this history is not covered by an overall plain vanilla
credit analysis..
2.
Overall credit analysis is often reduced to a limited number of information. Such like share-capital, number of employees and if the company
has problems to pay it's liabilities (see chapter company information below). This is certainly not enough for a safe judgement!
Hence, you find in the following a process how we can offer you. Our analysis is based on our experience in Banks and larger groups
Qualitative Items
Information about the Company
History, background, field of activity, number of employees, ownership and legal responsibility.
Management and Behaviour
Aibility and reliability of the management are unavoidable conditions for granting a credit, i.e. giving away a value without receiving the same value
in another form. No credit should be given to debtors which:
•
do not correspond with laws and basics of ethic behaviour, i.e. have a problem with the corporate governance;
•
with which too much negative experience was made;
•
have no not monitor information reliable which makes a analysis impossible.
•
For groups the whole structure and connections must be monitored in all details, at least the legal ones.
•
If the debtor was or is nearly bancrupt or insolvent.
...and so on in the following chapters, see the headlines below.We will be very pleased to assist you to measure your customer- and debtor risk!
Management
...
Information behaviour
...
Group Structure
...
Prosecution
...
Market and Presentation
•
Market
•
Strategy
•
Products and Services
•
Dependency
Financials and current Business
•
Profit & Loss Accounts
•
Balance Sheet
•
Budget / Forecasts
•
Uncovered Debts
Quantitative Items
Financial Considerations
•
Profitability
•
Solidity of the Balance Sheet
•
Financing Power
Measurements
...
Weighting of the Items
Risk Classification
The analysed risks lead to a classification in form of risk-gaps which are close to rating of the two large rating agenecies, Moody's and Standard &
Poors. The result is in the bandwith of: "In the short and midterm quite stable, long term very stable, also under unfavourable conditions." = AAA
resp. Aaa until "Loss of the loan (capital and/or interest) has to be taken into account. That means, provisions need to be made, further
unfavourable conditions lead directly to a loss of the investment." = C,D resp. C
Costs
•
Risk-Costs
•
Refinancing-Costs
•
Capital-Costs
•
Operating Costs
•
Market, Competitive Environment and Margin
The size of such a analysis according the above example is about 10-15 pages..
On top of this individual rating we have a cooperation with a high specialised rating agency which calculates the shortall risk with scientific
methods. Therefore we are able, to combine strong fundamential and deep analyis with scientific findings and provide in consequence the
very best possbile rating.
With this combiniation it is possible for you to measure your customer shortfall risk, the one for your vendors (very
important for key-vendors!) and of course your own reliability for the event of capital need from banks or shareholders!
Contact us, we would be glad to show you the possible opportunities!
only what the real value is (minus a margin), whatever the value is. He will and has to calculate the short-fall risk very carefully, especially for
larger amounts which could threaten his own business.
But if you have no possibility to assign a larger part of your receivables to a factoring company because the costs of the factoring are too much,
you can alternatively also figure out for yourselve what the credibility of your customer is. And, important, to manage therewith the final invoice
amount per customer. Every risk has his price between 0% and 100%. For many companies the information received from credit-rating companies
is sufficient enough, but there are two important disadvanteges:
1.
Every costumer is unique in his relationship with you. He has a personal history and this history is not covered by an overall plain vanilla
credit analysis..
2.
Overall credit analysis is often reduced to a limited number of information. Such like share-capital, number of employees and if the company
has problems to pay it's liabilities (see chapter company information below). This is certainly not enough for a safe judgement!
Hence, you find in the following a process how we can offer you. Our analysis is based on our experience in Banks and larger groups
Qualitative Items
Information about the Company
History, background, field of activity, number of employees, ownership and legal responsibility.
Management and Behaviour
Aibility and reliability of the management are unavoidable conditions for granting a credit, i.e. giving away a value without receiving the same value
in another form. No credit should be given to debtors which:
•
do not correspond with laws and basics of ethic behaviour, i.e. have a problem with the corporate governance;
•
with which too much negative experience was made;
•
have no not monitor information reliable which makes a analysis impossible.
•
For groups the whole structure and connections must be monitored in all details, at least the legal ones.
•
If the debtor was or is nearly bancrupt or insolvent.
...and so on in the following chapters, see the headlines below.We will be very pleased to assist you to measure your customer- and debtor risk!
Management
...
Information behaviour
...
Group Structure
...
Prosecution
...
Market and Presentation
•
Market
•
Strategy
•
Products and Services
•
Dependency
Financials and current Business
•
Profit & Loss Accounts
•
Balance Sheet
•
Budget / Forecasts
•
Uncovered Debts
Quantitative Items
Financial Considerations
•
Profitability
•
Solidity of the Balance Sheet
•
Financing Power
Measurements
...
Weighting of the Items
Risk Classification
The analysed risks lead to a classification in form of risk-gaps which are close to rating of the two large rating agenecies, Moody's and Standard &
Poors. The result is in the bandwith of: "In the short and midterm quite stable, long term very stable, also under unfavourable conditions." = AAA
resp. Aaa until "Loss of the loan (capital and/or interest) has to be taken into account. That means, provisions need to be made, further
unfavourable conditions lead directly to a loss of the investment." = C,D resp. C
Costs
•
Risk-Costs
•
Refinancing-Costs
•
Capital-Costs
•
Operating Costs
•
Market, Competitive Environment and Margin
The size of such a analysis according the above example is about 10-15 pages..
On top of this individual rating we have a cooperation with a high specialised rating agency which calculates the shortall risk with scientific
methods. Therefore we are able, to combine strong fundamential and deep analyis with scientific findings and provide in consequence the
very best possbile rating.
With this combiniation it is possible for you to measure your customer shortfall risk, the one for your vendors (very
important for key-vendors!) and of course your own reliability for the event of capital need from banks or shareholders!
Contact us, we would be glad to show you the possible opportunities!
Credit Analysis -
Manage Counterparty Risk
Do you really know the credit rating of your customers or vendors -
or do you know your own reliability to go in negotiation with banks?
A possibility to avoid loosing money due to a short-fall of your
customer is factoring. But your factoring partner will pay you for your
receivables only what the real value is (minus a margin), whatever
the value is. He will and has to calculate the short-fall risk very
carefully, especially for larger amounts which could threaten his own
business.
But if you have no possibility to assign a larger part of your
receivables to a factoring company because the costs of the factoring
are too much, you can alternatively also figure out for yourselve what
the credibility of your customer is. And, important, to manage
therewith the final invoice amount per customer. Every risk has his
price between 0% and 100%. For many companies the information
received from credit-rating companies is sufficient enough, but there
are two important disadvanteges:
1.
Every costumer is unique in his relationship with you. He has a
personal history and this history is not covered by an overall
plain vanilla credit analysis..
2.
Overall credit analysis is often reduced to a limited number of
information. Such like share-capital, number of employees and
if the company has problems to pay it's liabilities (see chapter
company information below). This is certainly not enough for a
safe judgement!
Hence, you find in the following a process how we can offer you. Our
analysis is based on our experience in Banks and larger groups
Qualitative Items
Information about the Company
History, background, field of activity, number of employees,
ownership and legal responsibility.
Management and Behaviour
Aibility and reliability of the management are unavoidable conditions
for granting a credit, i.e. giving away a value without receiving the
same value in another form. No credit should be given to debtors
which:
•
do not correspond with laws and basics of ethic behaviour, i.e.
have a problem with the corporate governance;
•
with which too much negative experience was made;
•
have no not monitor information reliable which makes a
analysis impossible.
•
For groups the whole structure and connections must be
monitored in all details, at least the legal ones.
•
If the debtor was or is nearly bancrupt or insolvent.
...and so on in the following chapters, see the headlines below.We
will be very pleased to assist you to measure your customer- and
debtor risk!
Management
...
Information behaviour
...
Group Structure
...
Prosecution
...
Market and Presentation
•
Market
•
Strategy
•
Products and Services
•
Dependency
Financials and current Business
•
Profit & Loss Accounts
•
Balance Sheet
•
Budget / Forecasts
•
Uncovered Debts
Quantitative Items
Financial Considerations
•
Profitability
•
Solidity of the Balance Sheet
•
Financing Power
Measurements
...
Weighting of the Items
Risk Classification
The analysed risks lead to a classification in form of risk-gaps which
are close to rating of the two large rating agenecies, Moody's and
Standard & Poors. The result is in the bandwith of: "In the short and
midterm quite stable, long term very stable, also under unfavourable
conditions." = AAA resp. Aaa until "Loss of the loan (capital and/or
interest) has to be taken into account. That means, provisions need
to be made, further unfavourable conditions lead directly to a loss of
the investment." = C,D resp. C
Costs
•
Risk-Costs
•
Refinancing-Costs
•
Capital-Costs
•
Operating Costs
•
Market, Competitive Environment and Margin
The size of such a analysis according the above example is about
10-15 pages..
On top of this individual rating we have a cooperation with a high
specialised rating agency which calculates the shortall risk with
scientific methods. Therefore we are able, to combine strong
fundamential and deep analyis with scientific findings and
provide in consequence the very best possbile rating.
With this combiniation it is possible for you to measure your
customer shortfall risk, the one for your vendors (very
important for key-vendors!) and of course your own reliability
for the event of capital need from banks or shareholders!
Contact us, we would be glad to show you the possible
opportunities!
customer is factoring. But your factoring partner will pay you for your
receivables only what the real value is (minus a margin), whatever
the value is. He will and has to calculate the short-fall risk very
carefully, especially for larger amounts which could threaten his own
business.
But if you have no possibility to assign a larger part of your
receivables to a factoring company because the costs of the factoring
are too much, you can alternatively also figure out for yourselve what
the credibility of your customer is. And, important, to manage
therewith the final invoice amount per customer. Every risk has his
price between 0% and 100%. For many companies the information
received from credit-rating companies is sufficient enough, but there
are two important disadvanteges:
1.
Every costumer is unique in his relationship with you. He has a
personal history and this history is not covered by an overall
plain vanilla credit analysis..
2.
Overall credit analysis is often reduced to a limited number of
information. Such like share-capital, number of employees and
if the company has problems to pay it's liabilities (see chapter
company information below). This is certainly not enough for a
safe judgement!
Hence, you find in the following a process how we can offer you. Our
analysis is based on our experience in Banks and larger groups
Qualitative Items
Information about the Company
History, background, field of activity, number of employees,
ownership and legal responsibility.
Management and Behaviour
Aibility and reliability of the management are unavoidable conditions
for granting a credit, i.e. giving away a value without receiving the
same value in another form. No credit should be given to debtors
which:
•
do not correspond with laws and basics of ethic behaviour, i.e.
have a problem with the corporate governance;
•
with which too much negative experience was made;
•
have no not monitor information reliable which makes a
analysis impossible.
•
For groups the whole structure and connections must be
monitored in all details, at least the legal ones.
•
If the debtor was or is nearly bancrupt or insolvent.
...and so on in the following chapters, see the headlines below.We
will be very pleased to assist you to measure your customer- and
debtor risk!
Management
...
Information behaviour
...
Group Structure
...
Prosecution
...
Market and Presentation
•
Market
•
Strategy
•
Products and Services
•
Dependency
Financials and current Business
•
Profit & Loss Accounts
•
Balance Sheet
•
Budget / Forecasts
•
Uncovered Debts
Quantitative Items
Financial Considerations
•
Profitability
•
Solidity of the Balance Sheet
•
Financing Power
Measurements
...
Weighting of the Items
Risk Classification
The analysed risks lead to a classification in form of risk-gaps which
are close to rating of the two large rating agenecies, Moody's and
Standard & Poors. The result is in the bandwith of: "In the short and
midterm quite stable, long term very stable, also under unfavourable
conditions." = AAA resp. Aaa until "Loss of the loan (capital and/or
interest) has to be taken into account. That means, provisions need
to be made, further unfavourable conditions lead directly to a loss of
the investment." = C,D resp. C
Costs
•
Risk-Costs
•
Refinancing-Costs
•
Capital-Costs
•
Operating Costs
•
Market, Competitive Environment and Margin
The size of such a analysis according the above example is about
10-15 pages..
On top of this individual rating we have a cooperation with a high
specialised rating agency which calculates the shortall risk with
scientific methods. Therefore we are able, to combine strong
fundamential and deep analyis with scientific findings and
provide in consequence the very best possbile rating.
With this combiniation it is possible for you to measure your
customer shortfall risk, the one for your vendors (very
important for key-vendors!) and of course your own reliability
for the event of capital need from banks or shareholders!
Contact us, we would be glad to show you the possible
opportunities!
