VALLEY COTTAGE, NY—June 13, 2016— CreditRiskMonitor (OTCQX: CRMZ), the leading financial risk and news analysis service on public companies for credit professionals, today announced its enhanced FRISK® business failure score – now powered by behavioral data crowd sourced from its subscribers, credit managers and professionals in Fortune 1000 organizations.
It’s the first predictive business credit score of its kind, driven not just by financial data but also through credit crowd sourcing.
CreditRiskMonitor is used by thousands of corporate credit professionals in Fortune 1000 companies around the world. Collectively, these credit managers manage billions of dollars of credit risk annually. Every day, they investigate and analyze public companies, giving them up-close access into changing risk profiles of these companies, a key driver of economic risk.
CreditRiskMonitor has found distinct behavioral patterns that emerge when its credit subscribers are investigating businesses with rising financial risk. As a company becomes more financially risky, credit professionals scrutinize companies more closely and show definitive patterns of activity.
CreditRiskMonitor is using this aggregate behavioral activity as an input into the enhanced FRISK® financial risk score, which predicts financial stress as the probability of a public company failing within 12 months. The usage data adds to the financial ratios, agency ratings and market cap volatility data already used in the score.
With the anonymous usage data from its subscribers now factored in, the FRISK® score is now 96% accurate in predicting U.S. public company bankruptcy within 12 months, making it one of the most reliable company financial stress scores available.
“Credit managers have a front-row view on changing risk conditions because they are in the driver’s seat every day,” said Jerry Flum, CEO of CreditRiskMonitor. “Our subscribers are credit professionals in the top companies of the world, managing literally billions of dollars of risk. We have proven that their activity signals coming financial stress. It’s not what they are saying that drives the risk signal. It’s what they are doing – which is far more powerful. We believe this credit score to be the first of its kind – and results in the most accurate financial risk score commercially available.”
CreditRiskMonitor’s proprietary FRISK® score is based on current financial statements, stock market volatility, market capitalization and bond agency ratings. As of today, it also factors in the behavior of thousands of credit managers in large companies. The score estimates the probability of business failure (bankruptcy) within 12 months and is proven 96% accurate in predicting failure of U.S. public companies.
“Everyone should know that public company risk is higher now than it was at the start of the Great Recession, and we can expect even greater trouble coming soon,” Flum says. “With the enhanced FRISK® score, for the first time, anyone concerned with financial risk can benefit from the inside view provided by the world’s top credit managers.”
CreditRiskMonitor (http://www.creditriskmonitor.com) is a web-based publisher and aggregator of financial information that helps corporate credit and procurement professionals stay ahead of and manage financial risk quickly, accurately and cost effectively. The service offers comprehensive commercial credit and financial risk analysis covering public companies worldwide. Unlike other commercial credit bureaus like Dun & Bradstreet, CreditRiskMonitor’s primary expertise and focus is on financial analysis of public debt and equity companies.
Additionally, the Company collects from subscribers more than $100 billion of trade receivable data on both public and a select group of private companies every month.
Over 35% of the Fortune 1000 depends on CreditRiskMonitor's timely news alerts and reports featuring detailed analyses of financial statements, ratio analysis and trend reports, peer analyses, bond agency ratings, as well as the company's proprietary FRISK® score.
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