Coface provides the automotive supplier with summarised and straightforward information on each of its suppliers, prepared by Coface’s experts in the form of reports that are updated several times each year.
On the strength of this information, the automotive supplier decides to review its portfolio of three suppliers. It agrees to higher volumes with two of them and scales back its contract with the third. According to the Coface report, the latter’s equity capital would have made it difficult to implement the capital expenditure needed in this sector in order to move up to the next technological level.
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We identify and assess the creditworthiness of companies with a detailed statistical method including several factors. The Debtor Risk Assessment (DRA) of Coface predicts the probability of an insolvency of a company over the next 12 months. The assessment scale ranges from 0 (insolvency) to 10.