1.Where are the data included in reports retrieved from?

Sources of information of the credit agencies are always legal and freely accessible.
The main sources are:
  • commercial courts – court registers,
  • business activity registers,
  • official gazettes (Court and Commercial Gazette (Monitor Sądowy i Gospodarczy), Polish Monitor(Monitor Polski B))
  • Commercial chambers, branch associations
  • economic press archives,
  • branch and regional rankings of companies
  • debt markets, register of debtors
  • direct interview with the investigated company
  • information from contractors and partners of the investigated companies
  • own, substantial database of information about companies and their history of payments
  • Central Statistical Office
An important source of information is also the Internet, however information gathered from this source is always under detailed verification.

2.What does financial standing mean?

Financial standing is a ratio illustrating financial situation of the subject only on the basis of financial statement of a particular year. The ratio is intended to simplify and speed up financial analysis of an enterprise. Value of the ratio determines financial stability and probability of declaring insolvency by an enterprise. Methodology of evaluation of company’s financial standing used by Creditreform is adjusted to specific character of conditions of running business activity in Poland.

3.What does PD ratio stand for?

PD (eng. probability of default) stands for probability of default stated in % (e.g. 1%). Value of the PD is estimated with use of evaluation methodology of the Creditreform Payment Capability Index.

4.What do selected company’s parameters indicate (mainly gross margin, working capital)?

Selected company’s parameters are a set of basic, available financial data for the last available period, such as: turnover, net profit, total assets, total liabilities and equity, as well as ratios such as: gross margin and working capital
- gross margin in % (counted as relation of gross profit from sales to value of income) indicating percentage sales profitability.
- working capital, being a difference between current assets and short term liabilities – is a financial measure used among others for evaluation of company’s financial liquidity and risk of insolvency (its value should be at least positive).

5.Financial ratios - trend

Trend indicators show course of changes in values of particular company’s financial ratios. Ratios taken into consideration: liquidity (wg. , profitability (wg. ROE), indebtedness (wg. ), equity (wg. Relevant position in the balance sheet).

6.What does value of maximum credit stand for?

In reports of business information agencies definition „maximum credit value” describes sales credit. Sales credit is a transaction of purchase-sale with delayed payment. Entrepreneurs in Poland increasingly pay their liabilities using the delayed payment term. Scale of that type of payment is enormous as the so-called sales credits is used in the sales strategy by more than 80 % of companies. The maximum credit must be implied as the highest possible value of sales credit which can be granted to the investigated company by single supplier of goods or services for approximate period of 60 days, with assumption that the subject has, at he same time in average 5 suppliers, providing goods and services.

7.What is the definition of the Payment Capability Index?

The Payment Capability Index informs about scale of risk within commercial co-operation with the evaluated company. The Payment Capability Index stated by Creditreform is automatically calculated from mathematical algorithm of 15 attributes which are stated in the commercial report on payment capability, as well as on the basis of comparative values from the branch analysis. Evaluation of the risk included in the Payment Capability Index is defined by a three-digit number. The digits respond to the used system of evaluation (from 1 = very good to 6 = insufficient). The second and the third digit allow a detailed diversity of evaluation. (more details)

8.What do EBITDA and Ebitda margin stand for?

EBITDA is a company’s profit before deduction of interests from loans, taxes and depreciation. EBITDA margin (presented in %) is calculated as a relation of EBITDA to the revenues. EBITDA and EBITDA margin are popular profitability indicators, which illustrate better than the net profit the level of the real income (cash) and at the same time the level of a potential indebtedness which the company is able to cope with.

9.Description of summary comparison of the company’s results with the branch (both tables)

Summary comparison of the company’s results with the branch - the comparison of the company’s indicators with the branch in a given year. For example, when the company’s indicator is better then the one from the branch of 6%, the result of the comparison will be presented in green (BETTER +6%), while the worse result will be presented in red (e.g. WORSE -20%).