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
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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