modeFinance Credit Limit

modeFinance Credit Limit modeFinance srl

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

The idea The philosophy behind every product developed by modeFinance is that, in the current financial world, any credit tool must be: Accurate: looks at fundamentals, adapts to both different countries and sectors, takes into account different aspects (multi dimensional).

Coherent: unique database by Bureau Van Dijk – coherent among countries and sectors.

Transparent: any evaluation should be explained well in order to have enough information in making decisions.

Flexible: the final clients should be free to add their own data and internal information.

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

What is mF Credit Limit?

Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with the analyzed company with an outlook of one year.

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

Credit limit

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Credit Limit

The better the equilibrium of a company among different fundamentals, the better the final rating

The credit limit takes into account different information from different sources

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

modeFinance credit limit Variables

Years of activity

Tangible Net Worth

Sector / Activity

MORE rating

Number of major suppliers Cash cycle

Credit limit

Others

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

Variables’ explanation Rating

• Credit rating is an opinion that is based on financial trustworthiness of a company: the better the rating, the higher the credit limit. It also represents the capability of the company to access to external funding.

Years

• It is well known that a startup company is much riskier than a company that has been operating in the market for a long time.

Number of major suppliers

• It represents how many different companies are providing goods and services, using the 80% of the total purchasing value.

Cash Cycle

• It is a measure of the average number of days that a company takes to collect revenue after a sale has been made. The lower DSO value, the higher the credit limit. It is important to compare those value with the average of the sector.

Tangible net worth

• It represents the amount of physical assets that a company has net of its liabilities. Thus, it represents the liquidation proceeds a company would fetch if it shut down and sold off all its assets.

For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

Model explanation Years: 60

Rating: CC

0

100

0

DSO: 30

100

0

100

modeFinance Credit Limit: correction of Tangible Net Worth (divided by the number of major suppliers) by the different parameters (MORE rating, ‌), using FUZZY techniques.

Some constraints: NO CREDIT LIMIT will be assigned IF THE RATING of the COMPANY IS EXTREMELY LOW (C-D Rating Classes) For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com

Where we are Trieste, Italy: AREA Science and Technology Park • The leading Science and Technology Park in Italy • Established in 1978 • Key point: only companies with high innovative technologies.

modeFinance Headquarter building R3, 2nd floor c/o Innovation Factory AREA Science Park, Padriciano 99 34012 Trieste ITALY Phone: +39 040 3755337 Fax: +39 040 3755176 e-mail: info@modefinance.com Web: www.modefinance.com For more information visit: www.modefinance.com or send an e-mail to: info@modefinance.com