© Frank Haluch 2011-2025

 
Supplier Financial Failure? “Our moderate to severe pessimistic forecasts anticipate 9% and 14.4% (increase in defaults) respectively, depending on how severe risks get from rising interest rates…” Moody’s said, referring to the next 12 months. (Default rate likely to triple by Sept. 2023: Moody’s | CFO Dive)

If you are not currently using Z-Scores* as a part of your supplier evaluations this would be a good time to start. SourcingApps software calculates a supplier’s Z-Score which predicts bankruptcy with a high degree of accuracy. Altman-Z Scores have a financial failure prediction rate of better than 85% over a five year period for publicly traded companies.

*Source: https://lnkd.in/etZakb7d - The Altman Z-Score is the output of a credit strength test that gauges a public or private manufacturing company's likelihood of bankruptcy. The Altman Z-score is based on five financial ratios that can calculate from data found on a company's annual 10-K report. It uses profitability, leverage, liquidity, solvency and activity to predict whether a company has high probability of being insolvent.

Sourcing is for Convergent Thinkers!