The credit crisis and recession has devastated small and mid-sized businesses. Getting a bank loan or securing capital from investors is a big challenge for small businesses. Banks have become extremely cautious in lending to small businesses. To be successful in securing credit you'll have to demonstrate that you are a good credit risk, that your company's prospects for growth are strong and that your business model is sound. Credit Redi is a set of business assessment tools that helps you demonstrate your credit worthiness and communicate with bankers and investors why they should extend credit to your business.
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Why Credit Score is important?
The quality of your credit rating and financial health form the basis for decisions other businesses make about you. Managing your business to improve your Credit Score will improve your company's financial health. A strong Credit Score indicates good financial health and is used by lenders, capital providers, customers and suppliers to determine:
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Risk Assessment Opportunity Discovery Applications
*Product and Market Risk / Opportunity Assessment
*Business Function Risk/Opportunity Assessment
*Macroeconomic Risk Assessment
*Critical Success Factors
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Input
Entering data on the Z Score input form is easy. Its designed to make for efficient and accurate report generation that is rapidly turned into actionable information. Time required to run and download any report is instantaneous.
Comparative Analysis
Our comparative analysis report is a quick and efficient method to ascertain strengths and weaknesses as entities grow, develop or otherwise change. Changes viewed over several periods provide insights not readily apparent with standard statements. Options exist to include from two to five periods. The business analysis calculator produces Income Statement, Balance Sheet, Risk Assessment, Equity Reconciliation, Cash Flow Statement, Source & Application of Funds with Changes in Working Capital, and Key Performance Indicators.
Note: Users of D&B and other premium reports (containing financial statements) will be able to tie base inputs back to agency reports. Limited input required for each period. Spend less than 30 seconds to generate reports containing up to five periods of data.
Risk Assessment
Altman's Z score method examines fundamental financial attributes. Working capital, earnings, reinvested earnings and leverage are integrated into a composite score. Though expressed somewhat differently for statistical reasons, the components and standards are similar to those used by traditional lenders. It is an easily understood approach that provides comprehensive financial details not available with the standard agency reports. When significant amounts are involved we recommend supplementing the analysis with reports from Small Business Solutions for other pertinent data and services.
Users can internally adjust cutoff scores needed to qualify for credit as their risk tolerance and economic conditions change. Lower scores and classifications indicate higher probabilities of default. Any ratings assignment should also include careful analysis of the income statement, balance sheet, changes in financial position and key metrics along with consideration of trends, economic conditions and other available data.
Income Statement and Balance Sheet
Statements are presented in a condensed format using a combination of specific line items and major groupings to obtain an overall look at major account classifications with related percentages shown. The single page recap of the periods allows users to quickly ascertain key balances, significant changes and trends.
Cash (Funds) Flow - Source and Application of Funds
Cash (Funds) flow statements are first grouped by activity and then again as a Source and Applications of Funds with Changes in Working Capital. These reflect the change in account balances including non cash transactions. A major benefit of this approach is that it accounts for all recorded balance sheet change.
Metrics / KPI's
Metrics / Key Performance Indicators (KPI's) - Additional analysis allows the user to review balances, percentages, amount of change, ratios and other standard measurements taken from the balance sheet and income statement. View the sample report for specific KPI's as forty line items are calculated per period. The same comparative format enables changes, trends and account relationships to be viewed for consistency and reasonableness.
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