Credit rankings

Many businesses are reluctant to face up to the topic of credit ratings, for a wide variety of reasons.  This could be due to cost, a lack of time, or based on the assumption that credit ratings only make a difference when trying to set up major credit facilities.

The fact is, however, that additional national requirements apply to banks that then flow down to their customers, in particular the requirement to publish economic status in line with § 18 of the German Banking Act (Kreditwesengesetz) and the minimum credit business requirements in accordance with § 25a KWG, which came into force on 1 July 2004.

The credit rating does not change the quality of your business, but it is however a valuable opportunity to consider your own business from an analytical perspective.

Rating reports

Our rating report provide you with the optimal opportunity to prepare for a discussion around the topic of credit.  Strengths and weaknesses relative to balance sheet ratios and return on investment quickly become apparent and, with suitable discussion, can be used as the basis for arguing your case.

Rating reports include:

• Information about the probability of insolvency over the last few years
• A value representing the calculated probability of insolvency, developed through a collaboration between DATEV Eg AND Professor Leker of the University of Münster
• A brief analysis of the profitability, financial position and assets of your business
• Information showing key statistics relating to your business’s position
• Reformulation of your data from a bank’s perspective
• A brief overview of qualitative factors and carefully prepared, relevant, and graphically illustrated analysis.

Of course, a planned discussion around credit with a bank is not a prerequisite for the preparation of a rating report.  It is also ideal for the purposes of internal reporting on the business; you can use the report as the basis for discussion at shareholders’ meetings, as the basis for a strategy planning session with the management team and shareholders, for financial control purposes, or as a decision making tool.