Financial Stress Score
What is a Financial Stress Score?
The Financial Stress Score (FSS) predicts the likelihood of business failure over the next 12 months. D&B defines business failure as a company that obtains legal relief from its creditors, ceases business operations without paying all its creditors in full, voluntarily withdraws from business operations and leaves unpaid obligations, goes into receivership or reorganization, or makes an arrangement for the benefit of creditors, based on the information in D&B's commercial database. The score ranges from 1,001 to 1,875, where 1,001 represents the highest probability and 1,875 represents the lowest probability of business failure.
What is a Financial Stress Risk Class
A Financial Stress Risk Class of 1-5 is a segmentation of the scoreable universe into five distinct groups where a one (1) represents businesses that have the lowest probability of failure, and five (5) represents businesses with the highest probability of failure. This Class enables a customer to quickly segment their new and existing accounts into various risk segments to determine appropriate marketing or credit policies. Note: Financial Stress Scores are not calculated for those businesses designated as "Discontinued at This Location", "Open Bankruptcy", or "Higher Risk". These records are automatically assigned a score of zero (0).
What is a Financial Stress Score Percentile?
The Financial Stress Score Percentile is a 1-100 ranking where a percentile of 1 has the highest probability of failure and a percentile of 100 has the lowest probability of failure.
How is Financial Stress (aka: Business Failure) defined?
D&B defines a financially stressed company as one that has ceased operations following assignment of bankruptcy, ceased operations with loss to creditors, voluntarily withdrawn from business operation leaving unpaid obligations or is in receivership, reorganization, or has made an arrangement for the benefit of creditors. Note: Voluntary discontinuance involving no loss to creditors is not defined as financial stress.
Description of Classes should always be:
Class 1 - Low
Class 2 - Moderate
Class 3 - Average
Class 4 - Significant
Class 5 - High