Delivers a score and grade based on the financial ratios and other non-financial
information.
Calculated in 'real-time' to take account of the latest information available.
Background
Scorecheck is based on the theory that it is possible to evaluate the
financial risk of a company from the behaviour of similar companies.
Seeks to identify potential business failure and corporate credit risk.
This was done by comparing a sample of 'good' and 'bad' companies and identifying
the common characteristics.
Developed to meet the need to have an automated scoring system.
How does it work?
Uses financial ratios as performance indicators of financial strength
and awards points.
Considers other non-financial information.
Rules based on financial variables available, i.e. different rules set
based on accounts filed.
Computes points total and converts to grade accordingly.
(See appendix one)
Once the weighted points and final calculation have been completed it will
be necessary to present a scoring category
The scoring categories are:
G
Gazette Code present
I
The accounts are insolvent (negative net worth)
O
The accounts are out of date
F
The accounts are very poor
E
The accounts are poor
D
The accounts are average
C
The accounts are above average
B
The accounts are good
A
The accounts are excellent
Within the categories A to F there will also be a + and - aspect depending
on the actual points scored. The groupings will be as follows:
ACTUAL SCORE
CATEGORY
0
-
4
F-
5
-
14
F
15
-
19
F+
20
-
24
E-
25
-
29
E
30
-
34
E+
35
-
39
D-
40
-
44
D
45
-
49
D+
50
-
54
C-
55
-
59
C
60
-
64
C+
65
-
69
B-
70
-
74
B
75
-
79
B+
80
-
84
A-
85
-
94
A
95
-
100
A+
It is the actual score and the score category from the above list that will
be displayed to the client.
Note:
Where the company is classed as dormant/non-trading by the recognition
of standard sentences used by RM Online analysts then grade NT will be displayed.
Where the company is classed as dormant by Companies House grade N is
awarded.
If the company has not yet filed accounts then grade NA will be shown.
In addition to the scoring categories shown on the previous page, web users
can avail of a traffic light system, which reflects the score awarded and allows
for quick assessment. Clients may use the Scorecheck score when determining
credit granting authority levels.