Apr
18
2012

What’s behind a failing business?

In the movie “Casablanca”, the French police chief has a famous line, “round up the usual suspects”.  The Financial Stability Risk Score, or FSR, predicts bankruptcy or severe payment default and the factors used by the scoring model are familiar ones.

Among the warning signals used:  61+ and 91+ delinquency trades and derogatories such as being placed for collection, liens, and judgments.  A young business and certain industries are also correlated with business failure.

So if you have a relatively high margin business and are looking to spot the worst offenders the Financial Stability Risk Score is for you, and it works extremely well with Experian’s payment delinquency score, the Intelliscore Plus  in segmenting slow pay BUT will pay, vs. slow pay AND NO PAY.  That distinction is the difference between your receivables making it home safely or getting mugged.

 P.S. If you’re one of our clients, we just added Financial Stability Risk Score to our Premier Profile report – at no extra charge!


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