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News 18 May 2021

New Financial Scoring – the Most Accurate Assessment of the Financial Condition of a Company

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New Financial Scoring – the Most Accurate Assessment of the Financial Condition of a Company

Profitable safe cooperation can be predicted in the long run. The tool Financial scoring, which was developed by YouControl analysts and raised business intelligence in Ukraine to a new level, is designed for this purpose. We updated Financial scoring and offer you even more accurate assessment of the financial condition of enterprises.

 

Financial scoring is an index of financial stability of companies. Taking it into account, you can predict the probability of bankruptcy of your counterparty and make a decision on cooperation with them.

Due to the expertise in economic theory, financial analysis and machine learning technology R&D, the YouControl team improved a scoring model. Now the tool generates an index of financial stability with increased accuracy.

With this tool financiers can estimate with high precision the probability of bankruptcy of any Ukrainian company, benchmarking experts – study competitors, audit companies – conduct researches and owners of small and medium-sized business – assess the prospects and risks of cooperation with legal entities.

 

How Does Financial Scoring Assess the Financial Condition of a Company?

 

Financial scoring consolidates and analyses data on the economic activity of a company over 5 years. Historical data and dynamics of financial indicators are taken into account – 20 financial indicators altogether, that indicate the state of liquidity, solvency, profitability and business activity of a company.

Technologies of machine learning, neural networks, financial analysis are used for data comparison. As a result, the value of an index is formed in the range from 1 (minimum financial stability) to 4 (maximum financial stability).

The effectiveness of the tool is confirmed by the history of bankruptcies of Ukrainian companies. According to the history of defaults of Ukrainian companies in 2015-2020, annually among the bankrupt companies in the group with scoring "C" and "D" previously there were about 85% of firms, while in groups "A" and "B" – only 15% of companies.

 

How to Assess the Financial Position of a Counterparty with the Help of Financial Scoring?

 

The financial scoring index is shown in the YouControl system in the profile of a company immediately under the Express analysis. Financial scoring has a letter expression (Latin): from "A" to "D".

 

 

A – high level of financial stability;

B – good level of financial stability;

C – satisfactory level of financial stability;

D – unsatisfactory level of financial stability.

 

Simply put, companies with the index "A" are more reliable than others. Companies with the index "D" went bankrupt 10-14 times more often than companies with the index "A".

The figure after the letter is a more accurate score that will be needed to study the dynamics. For example, a company had the index 3.1 (A) which rose to 3.7 (also A).

You will find the more detailed analysis in the tab "Finance" on the left navigation menu, in the menu line "Financial scoring". There will be the analysis of the liquidity of a company, its business activity, profitability and solvency.

 

Start checking right now!

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