Uncovering Your Unknown Risks: Private Company Solutions, With or Without Financials

On par with Jimmy Hoffa’s whereabouts or the location of the Ark of the Covenant, the financial health of private company counterparties is a persistent mystery; one that has eternally driven financial professionals mad. Even in 2021, more credit managers than not still primarily rely upon the inefficient marker of past performance to assess risk in privates. These credit managers are not without sympathy, as so often past payment records are the only tangible evidence that was in hand.

And to those who cross their fingers and hope for the best, we say: allow CreditRiskMonitor® to join the fray.

What if you knew that our company saves clients an incredible amount of time and money with more accurate – and thereby useful – private company risk solutions compared to Dun & Bradstreet? Regardless of whether you have your counterparty’s financials or not, we can get it done.

    CreditRiskMonitor is a B2B financial risk analysis platform designed for credit, supply chain, and other risk managers. Our service empowers clients with industry-leading, proprietary bankruptcy models including our 96%-accurate FRISK® score for public companies and 80+%-accurate PAYCE® score for private companies, and the underlying data required for efficient, effective financial risk decision-making. Thousands of corporations worldwide – including nearly 40% of the Fortune 1000 – rely on our expertise to help them stay ahead of financial risk quickly, accurately, and cost-effectively.

    How it works:

    • If your company does have access to your counterparty’s financial statements, or your counterparty can provide them, then you will gain access to comprehensive reporting features, including risk scores, standardized statements, ratios and trends, and industry comparisons, among other features. 
    • If your company does not have access to the financial statements of your counterparty, then chances are that a CreditRiskMonitor® PAYCE® score and/or an Experian® FSR ScoreSM will be available to assess the counterparty’s financial risk. The PAYCE® score makes use of trade payment data sourced from our Trade Contributor Program, which collects more than $2 trillion in accounts receivable annually. The program continues to expand each year with more trade contributors and larger trade files; and, as consequence, both the number of companies covered by the PAYCE® score and the accuracy of the model continue to increase and improve.

    Financials Available

    FRISK® score

    The 96%-accurate FRISK® score is a bankruptcy prediction model primarily used for public companies; the accuracy rate approaches 90% for private companies. The uplift for public companies stems from stock market performance, agency ratings, and subscriber crowdsourcing.

    Altman Z’’-Score

    The 75%-accurate Z’’-Score is a bankruptcy prediction model used for both public and private companies. As a public domain score and long relied upon by risk professionals, the Z’’-Score serves as a secondary risk assessment to the FRISK® score.

    Financials Unavailable

    PAYCE® score

    The 70%-accurate PAYCE® score is a bankruptcy prediction model that covers 90,000+ private companies in the U.S. and Canada. Unlike other payment models, the PAYCE® score is only available on businesses with a significant number of trade contributors and trade lines. Other payment scores such as the PAYDEX® score will use as few as two tradelines, which is akin to flipping a coin for your financial risk evaluation.

    Experian® FSR ScoreSM

    The Experian® FSR ScoreSM provides predictions for both default and bankruptcy risk and covers millions of U.S. private companies. This model derives from a variety of data categories such as payment delinquency, collection trades, credit utilization, public filings, and business background.

    Confidential Financial Statements

    The Confidential Financials Portal allows you to invite your counterparties to enter their own financial statements for processing. All financial information entered through our interface is secure and entirely confidential. Your counterparties have complete control over their data and can choose who can receive their processed report. In other words, everyone involved will never have to worry about an outside party or individual viewing the financials of your counterparty without expressed permission.

    After sending an invitation to your counterparty, CreditRiskMonitor® offers flexible options for financial processing, such as a shortcut or detailed form. Company reports are available for viewing within 15 minutes upon submission. Some of the primary report features will include:

    • Financial risk models with industry-leading accuracy, including the FRISK® score and Z’’-Score.
    • Standardized financial statements to evaluate companies worldwide, including 27 balance sheet line items, 14 P&L line items, and 16 cash flow line items.
    • Detailed financial ratios and trend analysis, including performance, leverage, liquidity, etc. 
    • Forty ratios in industry peer analysis for direct comparison between public and private companies.

    This streamlined process will deliver highly accurate risk scoring and allow you to perform thorough financial risk analysis so you can make critical business decisions in a timely manner. For a brief demonstration on how to use the portal, please watch our video.

    Enhance Your Workflows

    Subscribers can synchronize their own data with CreditRiskMonitor’s API integration. While public companies represent more than half of business-to-business transactions worldwide, you must always account for your largest private companies as well. To make highly accurate risk evaluations and decision-making even faster, bankruptcy scores including the FRISK® score, PAYCE® score, Z’’-Score, and Experian® FSR ScoreSM can all be found in one place to address both sides of the aisle.

    With our API, your team will be able to pull data when you need it, including a comprehensive range of financial and nonfinancial data, and access this real-time data for your internal models, databases, and dashboards. This option can be used to enrich large data systems and support automation for master projects or individual use cases.

    Bottom Line

    CreditRiskMonitor® offers comprehensive public company coverage and continues to expand private company reporting worldwide. Subscribers frequently cite our real-time and highly accurate bankruptcy risk tools to replace outdated risk solutions and enhance internal models. In an era of swelling business debt, risk management teams can never let their guard down.

    Have questions? Contact us today to learn more about our unique private company solutions.

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