We focus on public company risk because it’s enormous.
For perspective, public companies account for about $62.2 Trillion in annual revenue. Overall world GDP is $77.8 Trillion.
The risk is also underestimated. Our credit customers are surprised to find that they have an average of 53% of their overall dollar risk exposure with public companies, and the risk in supply chains is equally large.
One size-fits-all credit tools aren’t enough to protect you from public company risk surprises. Most commercial credit services emphasize trade payment data to predict risk. That works for private companies, but it’s misleading for public company risk.
Why? Payment patterns don’t reveal underlying financial stress for public companies. Public companies typically pay consistently -- right until they file bankruptcy. And, they sometimes pay late simply because they have easy access to capital markets. Payment patterns do not reveal their underlying financial health.
There’s a reason the SEC doesn’t require trade payment data, only certified financial statements. Use the right data for your decisions.
Our process is specifically designed to measure the financial health of public companies, based on financial statements, ratios and stock market movement.
It works really well. In 2015 and 2016, we successfully predicted 98.6% of U.S. public company bankruptcies in advance.
Are you using the right methods to analyze your risk?