Dun and Bradstreet (D&B) ratings are like a good sign of approval for companies. D&B is probably the world’s best known business reporting agency and its ratings are coveted by businesses and closely scrutinized by financial institutions and investors who want to know the financial health of any business. Dun & Bradstreet’s rating is prepared by a thorough examination of the company’s financial records, statements and dealings with its clients, investors and shareholders.
The D&B rating offers businesses the opportunity to build their business credit, mitigate the credit risks of other businesses, and ultimately improve their cash flow and ability to grow profits. D&B offers a number of other tools in addition to the basic rating that enable companies and financial institutions to make good decisions based on data and not just guesswork.
The Dun & Bradstreet rating measures a company’s business credit rating against others in the same field, as well as against companies operating in different countries and continents. The rating provides data on the company’s net worth or equity and then ranks these companies by the number of employees to reflect the company’s overall creditworthiness. It also measures both financial stability and company payment history, public filings, trade payments, company age, and other factors to produce the most comprehensive report on a company’s creditworthiness anywhere in the world. .
Other subsidiary products that increase the score are Paydex Score, Financial Stress Score and Commercial Credit Score. The Paydex Score is a report and score that evaluates a company’s payment record to its suppliers and vendors. The Financial Stress Score makes a prediction about the possibility that a company will have to file for bankruptcy within the next year. The Business Stress Score assesses the likelihood that a business will make a late or delinquent payment over the next twelve months.
However, all of these additional information products still play a secondary role in Duns’ rating. Not only can this rating help or prevent a business from receiving a business loan or line of credit extension, but it can also cause investors to shy away or panic, suppliers to suspend shipments, or sellers to refuse. to store products. In other words, maintaining a good D&B rating is essential to the successful operation of any business. Many companies, large and small, have risen and fallen based on the rating. Smart companies keep one eye on their balance sheet and the other on maintaining a good D&B rating.