 A new, highly predictive Financial Stress Score v.7.1 to assess business risk in an uncertain world
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D&B is committed to delivering customers the highest level of predictive performance. Recent, unprecedented economic change has contributed to a shift in the pattern of business failures and most notably, an increase in the failure rate of large businesses. In response, we have enhanced the D&B Financial Stress Score 7.1 (FSS 7.1), our most powerful predictor of business deterioration.
The Financial Stress Score is a statistically-based score that uses a combination of business demographics, past payment performance, public records data and financial statement data to predict the likelihood that, based on the information in D&B's database and our dynamic scoring model, a company will experience one or more of the following conditions over the next 12 months:
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Seek legal relief from creditors
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Cease business operations without paying all creditors in full
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Voluntarily withdraw from business operation, leaving
unpaid obligations
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Go into receivership or reorganize or make an arrangement for the benefit of creditors
To enhance the Financial Stress Score, we've introduced financial overlay rules that more effectively leverage financial statement and national debt rating data. These rules use financial ratios and ratings to measure liquidity, efficiency, leverage and profitability. Ratios are compared to norms and downward or upward score adjustments are made on businesses with ratios significantly worse than or better than the norm. As a result, the enhanced FSS 7.1 now offers a 26% predictive performance boost over the previous FSS score model v.7.0.
The enhancements impact the FSS raw score, percentile and risk class, offering greater insight into the health of a business. In addition to improving the predictiveness of the FSS Score, we have also re-defined the FSS Risk Class scale, making it more intuitive and actionable by 'normalizing' the distribution of companies across the risk classes. 
Recommended Actions for Agencies
We recommend agencies using the FSS scoring model be prepared to update their risk policies and score cut-offs to reflect the change in the new FSS score model. This is critical since the projected failure rates and performance odds for the Risk Class, Percentile and Score are different for the enhanced FSS v. 7.1.
FSS 7.1 is already tested and proven relevant and valuable among a range of D&B customers and will be available November 14, 2009. To learn more about the enhanced Financial Stress Score v. 7.1, contact your D&B Relationship Manager or our Customer Service Center at 1.800.424.2495. Additionally, look for your webinar invitation in November.
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| Billing Transformation Begins - A New Invoice, an Improved Experience |
We are pleased to announce D&B is undergoing a billing transformation - from invoice and usage redesign to online capabilities - and it begins with your November invoice. In recent Voice of the Customer surveys, you told us our D&B invoices were not meeting your needs. That's why we took the opportunity to do a complete review and improvement of the content, language and design of your D&B Invoice. We're confident that you'll like what you see.
- Easy to read and understand
- Clear, customer-friendly product descriptions
- Invoices match orders placed with D&B
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Key features and benefits
- Designed to be clear and easy to read
- Written in straightforward language - free of D&B jargon
- Clear direction on where to go if you have questions
- Page 1 summary showing key account information,
the amount you owe and the products you purchased
- Additional contract and product details on Page 2
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Our plans and commitment don't stop in 2009. In early 2010, we will launch redesigned usage statements and online billing services. This will enable you to view copies of your invoices online or go green by signing up to stop receiving paper bills. Additionally, we will launch online usage within DNB.com and DNBi, allowing you access to usage details when you want them and how you want them. You will be able to easily, search, sort, download and analyze your usage information without waiting for your paper statements or relying on your D&B Representative to send it to you.
If you have any questions about our billing transformation or would like to tell us what you think about our new invoices, email government@dnb.com or 1.800.424.2495.
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| Updated U.S. Business Trends Report -
October 2009
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In an update to the U.S. Business Trends Report, published in June 2009, D&B provides an analysis of and insight from recent failure, bankruptcy and delinquency trends through second quarter on approximately 22 million U.S. based businesses.
Insight 1: D&B estimates that the total number of actual business failures in June 2009 was over 95,000. This estimate includes bancruptcies as well as as those companies going out of business with unpaid debts in the next twelve months, making it almost double the number of official bankruptcies reported by the U.S. Government.
Note: See full report for sources and definitions.
Insight 2: Overall US Business failure rates have improved in the past 12 months, however; the Transportation, Construction and Business Services industries failure rates remain 50%-80% higher than the US average.
Due to the continued housing instability and steep drop-off in the tourism, travel and hospitality sectors, Nevada and California are the states ranked with the highest failure rates.
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Insight 3: D&B sees an improvement in payment delinquency trends (the rate at which businesses pay their suppliers) in Q2, a leading indicator for bankruptcy rates. We remain concerned with the rate of bankruptcy filings; however, we expect an improvement in the number of businesses filing for bankruptcy.
Note: Highlights overall percent of outstanding balances that are 90+ days past due (DPD)
Download now to read D&B's complete analysis in the U.S. Business Trends Report. | |
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| Download U.S Trends Report |
Download the October U.S. Trends Report:
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| Download Lending Oversight Whitepaper |
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| Learn More |
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Questions? |
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Call the D&B
Government Customer
Service Center at
1-800-424-2495
M-F 8AM - 5PM EDT
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