The FRISK® score routinely identifies zombies across all industries. In fact, total high-risk companies worldwide have increased by nearly 50% since October 2021, which indicates another wave of bankruptcies is on the horizon.
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Optimal assessment of public company bankruptcy risk requires the balanced, holistic analysis provided by the FRISK® score.
Sanctions have delivered significant financial stress to the Russian government and corporations alike. Overall, many Russian companies have dropped into – or have sunk further down into – the FRISK® score red zone, indicating heightened financial stress and corporate failure risk.
As the fallout from one of the biggest bankruptcies of 2019 begins to settle, we see that credit and procurement professionals who evaluate risk in public companies as a habitual practice are proving to be the best at avoiding unnecessary exposure.
Credit professionals use CreditRiskMonitor®’s Trade Contributor Program to gain quality, real-time insights into their accounts receivable portfolio. We collect in excess of $2 trillion in trade data annually from our trade providers. After processing this data, we work with credit professionals to be more proactive and tactical with their accounts receivable to make healthier business decisions.
More than a decade after the Great Recession, the reality remains that as patterns of credit cycles are historically predictable, you can't ever let your guard down as a financial risk assessor.
When this current benign credit cycle ends, debt losses could approximate $1.2 trillion for public companies. Are you going to wait until your customers and suppliers are bankrupt or are you going to take action now?
Bankruptcy risk is a specific area procurement professionals should focus upon when evaluating publicly held suppliers’ financial performance – especially given the effect of competitive pressures on corporate margins and daily news stories about growing levels of global debt.
With the PAYCE® score providing a substantial uplift compared to traditional trade payment analysis, more and more risk professionals are adding the bankruptcy model into their workflows and processes.