On the Internet you will find a lot of (financial) data about companies. The development of sales and profits says a lot about possible solvency. Sometimes you can also find customer experiences or details about the payment amount. Solvency is based on a large amount of data, usually financial. By combining this data, a credit score or credit score is calculated. This provides information on the degree of creditworthiness. The credit score is often expressed by the letters A, B, C and D. With a D rating, there is no solvency. The term solvency often appears in financial news.

Literally, it means: «fit to qualify for a loan». And this is actually the basis of solvency. Would you lend money to a specific person, company, or country? And do you think you will get that money back? On this wiki page you can learn all about the importance of creditworthiness, how it is calculated and how you can influence your own creditworthiness. Financial health results, among other things, from the amount of debt relative to equity. But cash flow also plays a role. Are cash flows sufficient to meet current obligations? High profitability and sales growth lead to a better credit rating. Payment behaviour is also important: are invoices paid within the agreed payment period? Companies with many customers are more creditworthy than companies that depend on only a few customers. Too many stocks put pressure on creditworthiness, as there are risks associated with many stocks. In addition, there are professional institutions that collect and sell financial data on companies.

This is often information that is difficult to find in public sources. For example, Graydon is a company that collects credit information and supplements it with its own data to determine the creditworthiness of businesses. But there are still factors that affect solvency. Just think of the directors of a company. If they are already known during a previous insolvency, the solvency is lower. Compliance with publication obligations, correct payment of social security and VAT are also important indicators that influence solvency. Also internally, within your company, you will find a lot of valuable information. This gives you insight into the payment and purchasing behavior of existing customers. The representative who is in direct contact with the customer or prospect can also make a useful contribution.

He goes to the site and sees with his own eyes the state of the company, the actions, the contact person, . This information can also have a significant impact on the creditworthiness of your business relationship. E-filing exemption – The requirement to file the claim electronically via RegSol does not apply to the following classes of creditors unless they are assisted by legal counsel: Several factors affect the solvency of an organization. However, you have no control over some of them, such as the industry in which you operate. Other factors are under your control. Just think about your payment history and financial ratios. In addition, the solvency of companies as a whole says a lot about the state of the economy. When solvency decreases, it means that companies are less financially healthy. And then the economy can suffer. Creditworthiness is important for consumer confidence. Banks look at the creditworthiness of companies that knock on the door to get a loan. There are professional rating agencies that do nothing more than monitor the creditworthiness of companies and countries.

The best known rating agencies are: Fitch Ratings, Moody`s and Standard & Poor`s. In addition, there are specialized providers of business information that give a credit score to prove the creditworthiness of companies. Solvency has been a much-talked about concept since the 2008 financial crisis. At that time, it was mainly about the solvency of countries. In 2011, Greece received a credit rating from CCC, the lowest in the world. Listed companies with low solvency are called junk bonds. Finally, the solvency of listed companies is important for investors and stock prices. As of April 1, 2017, the rules for filing a claim in bankruptcy proceedings will be changed.