Delivering Financial Health Insight - Continuously
Financial health provides forward-looking visibility into a company’s ability to grow with you when business is good, weather unforeseen disruptions as they arise, and its capacity to invest in infrastructure and resources, both financial and non-financial. Our Financial Health Insight:
- Uses solely quantitative methods and machine learning techniques that analyze all relevant financial data
- Rates private financial statements and public company filings
- Accounts for differences across sector, size, strengths, and weaknesses
In most cases, a one time snapshot is not enough. Continuous insight into your vendors’ financial health status and overall risk to your business is the best way to management and mitigate third party risk.
Evaluating Financial Health
Financial health is often used to describe many different types of ratings and analytics, but at its core, financial health means evaluating a company’s financial statements. The financial statements alone can reveal many aspects of a company, including:
- Profitability
- Operating Efficiency
- Earnings
- Liquidity
- Leverage
- Debt Coverage
- Probability of Default
The financial health of a company does not include share price or market inputs, which are a reflection of investor sentiment rather than a company’s financial strength.
Financial Health Helps You Navigate the Complexity of Supplier Business Relationships.
How can financial health help you make better business decisions with your third parties, including suppliers, vendors, counterparties, and other business partners?
- Provide early warnings of future performance or potential disruption issues before they occur
- Support strategic decision-making to take risk mitigation action and/or adjust your business relationship strategy
- Help identify which existing third parties are most capable of improving their performance
- Select businesses at the procurement or sourcing stage that are most likely to contribute positive performance where you have no relationship history
- Act as a universal metric to create a common language for managing risk across your enterprise
- Build better relationships with third parties due to increased transparency and work together towards a shared goal
- Understand third parties that can both react to unexpected risk events and proactively prevent potential issues
- Shape your supplier, third party, and vendor relationship strategy