THIS REPORT GUIDE HELPS YOU TO INTERPRET D&B CREDIT REPORTS. D&B Credit Reports available online:

Transcription

1 D&B REPORT GUIDE

2 THIS REPORT GUIDE HELPS YOU TO INTERPRET D&B CREDIT REPORTS. D&B Credit Reports available online: European Compact Report background information for small decisions. European Report extensive report for credit decisioning. European Comprehensive Report the most comprehensive, analytical report with closer look of company s financial trends and situation within the line of business. International Business Information Report is available in the countries outside the Western Europe and in the Nordics. D&B Comprehensive Report is available in USA and EMC countries in Eastern, Central and Mediterranean Europe. Information available in credit reports: Report Sections International Business Information Report D&B (European*) Comprehensive Report D&B European Report * D&B European Compact Report * Identification Evaluation D&B Rating Comparison Summary Public Notice Information Special Events Bankers Principals D&B Collection Services claims Limited - - Payment Habits Limited Key Data - Financial Comparison Key Data Performance Ratios Limited Key Data - Financial Statement - Corporate Structure - History / Operations - Press Cuttings Limited - Management Comment Limited - : Complete - : Not present in report Key Data : Key data, not full analysis Limited : Available only in certain countries * Available from Austria, Belgium, France, Germany, Great Britain, Ireland, Italy,Luxembourg, Netherlands, Portugal, Spain and Switzerland

3 The D&B Reports contain following information: The information can vary depending on the country and the company. Identification D&B Risk Assessment Payment information Summary Special Events Public record information Bankers Current Principals Legal Structure Financial Comparison Financial Ratios Financial Statement Corporate Structure History / Operations name, address, telephone number, company id credit worthiness, credit recommendation Payment performance, Paydex overview of the important things on the report events, which have a great impact to company s business for example listing to stock exchange information gathered from public registers, for example remarks of payments company s bank details members of the board registration info financial comparisons financial ratios profit and loss account and balance sheet parent and subsidiaries company s operations now and earlier Identification Company Name Address Registered Number Duns Number Trading Style Established year Date of Incorporation Registered Office Line of business (SIC) Local Codes Failure Risk Score / D&B Score / DB Failure Score Company s full legal name The full trading address is provided. Local company id This is a unique number assigned by D&B to each business and allows you to move from one D&B file to the next to find additional information about a company. These are the alternative names under which a company trades. Not to be confused with the trade names which relate the products sold by the company. Up to three trading styles will be provided for companies. This refers to the year when the business was formed. This is the date when the business was registered and should not be confused with established year. This field will only be presented if the Registered Office address is different from the trading address US Standard Industrial Classification code Local line of business codes, SBA for Germany, APE and NAF for France, NACE for Italy and Belgium. The local codes are in addition to the US SIC code. Failure Risk Score describes company s risk of failure. It predicts the probability of severe distress or failure. Failure risk Score enables a customer to utilize more granular cutoffs to drive their automated decision-making process. The Failure Risk Score Percentile ranking of indicates where a company falls among businesses in the local D&B information base, and is most effectively used by customers to rank order their portfolios from highest to lowest risk of business failure. A percentile score of 1 represents businesses that have the highest probability of financial stress, and a 100 that represents businesses with the lowest probability of financial stress. Percentile rankings are available from Western Europe, the US and Australia.

4 D&B Delinquency Score The D&B Delinquency Score is a statistically modelled score indicating the risk of severely delinquent payments based on the information in D&B s file. The higher the Delinquency Score the lower the probability of payment delinquency. For example, the US Delinquency Score predicts the likelihood that a company will pay its bills in a severely delinquent manner (+ 90 days past term) over the next 12 months, based on the information in Dun & Bradstreet s files. Severely delinquent is defined as a business with at least 25 % of its payments slow and at least 10 % of its payments 90 days or more past due. Note: Delinquency Scores in other countries may be defined somewhat differently, but the underlying statistical principles remain the same. The D&B Delinquency Score Percentile ranking illustrates where a company falls among businesses in the D&B information base, and is most effectively used by customers to rank order their portfolios from highest to lowest risk of severe payment delinquency. The Percentile ranking is based on a scale, where a 1 represents businesses that have the highest probability of severe delinquency, and a 100 that represents businesses with the lowest probability of severe delinquency.have the highest probability of severe delinquency, and a 100 that represents businesses with the lowest probability of severe delinquency. D&B Risk Assessment Company s credit worthiness which is often displayed as company s financial strength added with a risk indicator. In some countries Failure Score is available. D&B Rating Esimerkki. D&B Rating 5A 4 5 A + 4 D&B Rating 5A 4 Financial Strength indicator Risk Indicator D&B Rating consists of two indicators; Financial Strength Indicator, which describes company s financial status and Risk Indicator which represents company s credit worthiness. D&B Financial Strength Indicator An alpha-numerical code (e.g. 5A) is assigned based on the net worth. + convertible debenture + contribution of silent partners + 60% of the special reserves As they appear in the most recent balance sheet If the balance sheet figures are not available, the Financial Strength Indicator is based on the capital issued to the shareholders or, in Germany, on the total assets. In this case, a number and two letters are used (e.g. 5AA)

5 1. D&B Financial Strenght Indicator Austria, Belgium, France, Germany, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Spain Financial Strength Indicator Euros Net worth Total assets/paid up capital From (euros) To (euros) 5A 5AA 50,000,000 4A 4AA 25,000,000 49,999,999 3A 3AA 10,000,000 24,999,999 2A 2AA 2,000,000 9,999,999 1A 1AA 1,000,000 1,999,999 A AA 500, ,999 B BB 250, ,999 C CC 150, ,999 D DD 100, ,999 E EE 50,000 99,999 F FF 25,000 49,999 G GG 10,000 24,999 H HH 0 9,999 Other Ratings ND O NB NQ Negative net worth Net worth is undetermined New business Company has ceased its activities 2. D&B Risk Indicator and D&B Score When a company is given a Risk Indicator of 2 (+) (Score range 66-82), it means the risk of failure is below average. In contrast, a Risk Indicator 4 (+) indicates a very high likelihood that a company will not pay. Risk Indicator D&B Score Class D&B Score Class% Explanation of risk ,40 % minimum risk 2 (+) ,11 % below average 2(-) ,73 % average: tends towards below average 3(+) ,53 % average: tends to high 3(-) ,05 % high 4(+) ,12 % very high 4(-) % insolvent - undetermined -- undetermined

6 Payment Information Payment Score Paydex The Paydex is derived from real payment experiences based on more than 500 million items of billing information annually obtained from the DunTrade Program. It is an effective monitoring indicator of potential company liquidity problems. D&B Paydex Index Payment record 90 Discount utilisation 80 According to agreement 70 Slow up to 15 days 60 Slow up to 22 days 50 Slow up to 30 days 40 Slow up to 60 days 30 Slow up to 90 days 20 Slow up to 120 days 10 Slow up to 150 days 0 Slow up to 180 days UN Not available Payment record Trade references Placed for collection Amounts High Credit Now owes Past due Selling terms EOM NMFI Last sale within Suppliers, who have given the billing information Debt is placed for collection Paid bills are in 0-level, other transactions according to the given record. Supplier s highest credit during last 12 months Total debt to the supplier Total debt which is overdue Terms of payment (net 30 = due within 30 days) End of the month Next month following invoice Time in months from the latest buy from this supplier Industry Comparison last 3 months Upper segment top 25% Lower segment bottom 25% Medium segment middle 50% Average delay for the best payers in this line of business Average delay for the worst payers in this line of business Average delay for the medium payers in this line of business

7 Summary Summary of company s activity and key information Start date Incorp. Date Legal form Employees Nominal capital Issued capital Sales Profit / (Loss) Net Worth Established year Date of registration The type of business, legal entity Number of employees Maximum capital Paid capital Turnover in thousands Financial period s result The value of business to its owners, consisting of issued shared capital, share premium account, retained earnings and other reserves SIC Code: Standard Industrial Classification = International line of business code Special Events This include special events like change of Chief Executive, fire or other disaster, change of legal form, insolvency etc. Up to twelve special events may be displayed. Public record information Public record Country court judgement Protested bills Mortgages Bankruptcy Charges lodged URSSAF (Ranska) Treasury (Ranska) Lien UCC filings (Pohjois-Amerikka) Explanation This is a final decision by a court. A monetary judgement requires the payment of a sum of money by one part to another. When one doesn t accept the bill or doesn t pay on time the other can protest the bill. a conveyance of an interest in property as security for the repayment of money borrowed. Company has gone into bankruptcy. Chattel mortgages. Unpaid social charges to the state. Unpaid taxes. A claim a creditor holds against specific property of a debtor as security for satisfaction of a debt. The claim may arise from such things as unpaid taxes or a court judgement. Mortgages Suit A suit (Settled = solved Pending = ongoing process) Bankers Bank name and address

8 Principals / Management Principal names and functions and other current associations for the principals will be displayed here. Up to twenty principals may appear. Financial comparisons These are in local currency and US dollars. Up to three years financial comparatives will be shown. Name Net sales Profit for the year Net Worth Fixed assets Accounts Receivables Current Assets Net Assets Explanation Total amount of sales achieved from operations during the financial period The profit for the year carried over from the profit and loss account The value of the business to it s owners, consisting of issued shared capital, share premium account, retained earnings and other reserves Total fixed assets Trade Debtors The total value of all current assets This field is Total Assets minus Intangibles Degree of Indebedtness (%) This is calculated as Total Debts / Total Liabilities (incl. Net Worth) x 100 % Current Liabilities Working capital Long-Term Liabilities Total Debts Total Current Liabilities Net Working Capital = Current Assets-Current Liabilities. (For Germany; Total Current Assets (Total Current Liabilities + Deferred Taxation + Other Provisions). The total amount outstanding on all of the long term liabilities The total of all debts. Owed by the company Key Financial Ratios Company s key figures calculated from Financials. All ratios contain one decimal place. Key ratio Profit Margin (%) Acid test Ratio Current ratio Quick Ratio Net worth to total assets Description Profit divided by Sales (In France: Profit Before Tax divided by Sales). Cash plus Trade Debtors divided by Current liabilities, also known as the liquid ratio. Current Assets divided by the Current Liabilities. A rule of thumb is that at least 2 to 1 is considered a sign of sound financial strength. Current Assets minus the Stocks divided by the Current Liabilities. The Quick Ratio measures the extent to which a business can cover its current liabilities with those current assets readily convertible to cash. A ratio of 1,0 is desirable. Net Worth of a company divided by the Total Assets

9 Asset Turnover Stock Turnover rate Cost of Stock by Days Asset Turnover Return on Assets Sales divided by Total Assets Sales divided by Stocks Stocks divided by Cost of Goods Sold Sales divided by Total Assets Profit Before Tax divided by Total Assets. This is key indicator of the profitability of the company. It matches net profits after taxes with the assets used to earn such profits. A higher percentage rate will tell you the company is well run and has healthy return on assets. Collection Period by Days The collection period ratio is helpful in analyzing the collectability of accounts receivable, or how fast a business can increase its cash supply. The quality of receivables of a company can be determined by this relationship, when compared with selling terms and industry norms. Generally, where most sales are for credit, any collection period more than one-third over normal selling terms is indicative of some slow turning receivables. (in France this is Trade Debtors plus Discounted Bills not paid divided by Sales plus VAT Rate). Shareholders return Profit Before Tax divided by the Net Worth. In France this is calculated as Profit Before Tax divided by Tangible Net Worth, but only if both figures are not negative. Sales to Net Working Capital Asset Utilisation Sales divided by Net Working Capital. This measures the number of times working capital turns over annually in relation to net sales. A higher turnover rate can indicate overtrading (an excessive sales volume in relation to the investment in the business). Total Assets divided by Sales Creditors to Sales Liabilities to Net Worth (Also known as Gearing) Fixed Assets to Net Worth Average Wage per Employee Date of Capital Increase Trade Creditors divided by Sales multiplied by 365. This measures how the company pays to its suppliers in relation to the sales volume being transacted. A low percentage would indicate a healthy ratio. The Total Debts, or Outside Liabilities, divided by Net Worth. This shows how all of the company s debts relate to the equity of the owners or shareholders. The higher this ratio, the less protection there is for creditors of the business. This is Total Liabilities to Net Worth. The Fixed Assets of the company divided by the Net Worth. This shows the percentage of assets entered in fixed assets compared to total equity. Generally, the higher this percentage is over 75%, the more vulnerable a concern becomes to unexpected business hazards. Capital is frozen in the form of machinery and the margin for operating funds becomes too narrow for day-to-day operations. The Average Wage per Employee is calculated as the Employee Costs divided by the Average Number of Employees during the financial period. This refers to the year of Statutory Duration for Italian companies i.e. how long the company s limited liability lasts for.

10 Financial Statement Term explanation Consolidated Balance Sheet Long - Term Assets Land Buildings Fixtures & Equipment Intangibles Land and Buildings Total Tangible Fixed Assets Deposits Loans to Participants Participating Interest Depreciation and Amortization Balance Sheet Short-Term Assets Raw materials Finished Goods Corporate group figures Long-Term or fixed assets such as land and buildings, plant and machinery which were acquired for use in the business and not for the purpose of resale. Fixed assets are depreciated over their working life and are recorded on the balance at cost less depreciation, not at market value. Land is not normally depreciated and fixed assets may be re-valued periodically. Any values shown are as the balance sheet date. The value of the company s land The value of the company s buildings The value of company s fixtures and equipment. In Germany this is Fixtures & Equipment plus Machinery and Tools. Includes such items as patents, trademarks, and the results of research and development work. For Italy, this field is calculated from Patents, plus Goodwill, plus Other Intangibles, less Intangibles Depreciation. Amounts relating to land and building. Note: Improvements to leasehold property is included in this field if lands and / or buildings are present. If there are no land and/or buildings figures in the breakdown, amounts relating to improvements are shown in Fixtures and Equipment. Assets which cannot be quickly realized for cash (e.g. land, buildings, plant, equipment, etc), and which the company is not expected to sell in the normal conduct of its business, but uses to effect its business. In Italy this amount is calculated from Land and Buildings plus Machinery and Tools plus Other Fixed Assets, less Fixed Asset Depreciation. The amount of money deposited on a long term basis with the purpose of earning interest. The amount outstanding any long term loans made to the shareholders The cost of any participating interest that company holds in other concerns. The amount of depreciation and /or amortization written off tangible and / or intangible fixed assets. Short term of current assets are normally used up in operations or converted into cash during the financial period. Current assets include fixed or other assets. The cost of the raw materials currently held by the company. The stock of goods available for sale normally valued at the lower of cost or market value.

11 Merchandise Fixed Assets for Sale Prepayments Stocks Trade Debtors or Accounts Receivables Doubtful Receivables Cambiali Directors Cash and Liquid Assets Accruals Unpaid Capital Total Assets Balance Sheet Short-Term Liabilities Trade Creditors Proposed Dividend Total Current Liabilities Balance Sheet Long-Term Liabilities Minority Interests Deferred Taxation Allowances Depreciation of intangible Assets Surplus of Revaluation Capital Reserves The amount of merchandise currently held by the company available for re-sale The value of any fixed assets available for sale which are expected to be realized in the course of the financial period. The amount paid on any expenses which have been settled in advance, for example - rent. The stock of goods available for sale normally valued at the lower of cost or market value, not at selling price. Trade Debtors or Accounts Receivables is the money owed to business by its customers The amount of any debts which are due for settlement but which the company believes will not be realized. Used specifically for Italian concerns this is the amount owed by customers by way of bills of exchange, promissory etc. The total of the company s cash balances. They may also include liquid assets; those assets that may be easily realized into cash. The amount owed to the company representing a portion of total owed for work undertaken by the company which has yet to be completed. The amount owned by shareholders for any issued capital which has not been paid for. The total of all things of value to a firm. Liabilities due to creditors which are due for payment within one year. The amount owed to trade creditors, otherwise referred to as Accounts Payable. The amount recommended by the directors to be paid as a dividend, subject to approval at the AGM. The total of current liabilities owed by the company. (For Belgium: the Current Liabilities = Total Liabilities + Regularization Account (accruals and deferred income). Liabilities due to creditors which are not due for payment within one year. The portions of share capital and reserves of any subsidiary companies that have been consolidated on the balance sheet and which are attributable to the minority shareholders of those companies. Deferred taxation allowances arising from the effect of timing differences from Profit & Loss Account. Any amounts set aside against the possibility of future liabilities. The Amount written off the value of intangible assets The net amounts by which the book value of fixed assets has been increased following a revaluation and having made an allowance for taxation. Capital surplus which is not available for the payment of normal dividends.

12 Unavailable Reserves AGM Retained Earnings Total Stock Equity Profit And Loss Account Total Income Net sales Change of Stock Own Work Capitalised Supplementary Operating Income Stock Purchases Cost of Goods Sold Cost of Sales Gross Profit Total Payroll Costs Contingency Costs Extraordinary Depreciation of Current Assets Asset Utilisation Profit Distributed to Employees Net Profit An unavailable reserve is formed when a company buys its own shares. Unlike available reserves this may not be distributed by the shareholders at the AGM. Annual General Meeting The net balance of profits / losses accumulated over the year and transferred to the balance sheet The total stockholders equity or net worth of a company. The most recent year available is provided in local currency and US dollars The total income achieved during the accounting period. Total amount of sales achieved from operations during the accounting period. The difference in the value of the company s stock at the end of the accounting period to the value at the start of the period. The value of work done within the company that has added to the worth of the company The amount of supplementary operating income during the financial period. This is miscellaneous income from additional activities, e.g. patent rights, commission for providing services to other companies etc. The cost of finished goods purchased during the accounting period The cost of the goods sold during the financial period Expenses directly attributable to the cost of sales during the financial period The gross profit during the financial period having deducted the cost of goods sold, or the cost of sales, from the sales turnover and taking into account own work capitalized. Generally payroll, but also includes benefits such as medical insurance and redundancy. Amount set aside by the company in case of unforeseen expenses. Any extraordinary amounts written off the value of current assets e.g. following damage resulting from fire/flood etc. Asset utilisation is calculated as Total Assets divided by sales The portion of the company s profit (loss) attributable to the employees. As a result of a profit sharing scheme for example. The net profit of the company, after all deductions have been made which is available for appropriation.

13 Corporate structure Parent legally registered name, duns and address, Ultimate parent duns and country and subsidiaries names, duns and countries. Up to ten subsidiaries will be provided. If company owns 50 % of another company, it s a parent company with its 50% ownership. A maximum of five branches locations will be displayed. Where there are more than five branches, the total number will be given. History / Operations The company s line of business as SIC code and local line of business code might be displayed as well. Some other operating details, like where company exports and from where imports. Number of employees Premises Press Cuttings Press cuttings from newspapers are displayed if there has been significant news of the company. Management Comment During the investigation the additional information from company itself. If company has declined to provide any information, that will be mentioned here.