The above mentioned model require stock price as part of the calculation so they only work for PUBLIC company. RiskShooter model works for both PRIVATE and PUBLIC companies because we do not rely on stock price.
There are many applications. One of the important one is to help company evaluate risk in AR portfolio. For most companies, AR is around 50% of current asset in the balance sheet. And almost 80% of the counterparts in the AR protfolio are PRIVATE companies with no stock price.
RiskShooter allows you to incorporate risk/reward analysis in your investment decision but Altman Z-score can't. RiskShooter provides default rate (in percentages such as 2%, 3%) that let you compare directly with the return rate of investment. Altman Z-score provide ranges of number which make it difficult to compare with investment reutrn. Altman Z-Score of less than 1.8 means bankruptcy is likey. Ths score between 1.8 and 2.99 is grey area and a score above 2.99 means the company is strong.
We can update the score eveytime a financial statement become available, approximately every 3 months for public company and 12 months for private companies
We perform fundamental analysis using company financial statements. The ratios we use and the importance of each ratio is determined by our statistic model.
RiskShooter cannot predict the stock price or its direction. However, we can help you identify stock that may suddenly become worthless due to bankruptcy filing. If you are a passive stock investor living off dividend, this is a very valuable tool.
For now, you can pro-actively use the form at our home page to evaluate your investment. You should be very cautious with any investment that has a RiskScore of more than 4.5.
In the future, we will allow users to register their investment profile on our website so they can receive RSS feed when their portfolio become very risky.
D&B provides a lot of information including financials, comparative financial ratios, payment trends, public filings, demographic data, peer assessment and more. RiskShooter help you move a step further in your decision-making process by providing the default rate/loss rate for each of your investment.
The rule of thumb is that you invest if the rate-of-return is more than the risk-of-loss (this is call Risk/Reward Ratio). Companies normally know the rate-of-return but have no way to quantify the risk-of-loss. Information from D&B at best provides you a guts feeling about the quality of your customer. RiskShooter brings you to the end of the decision-making process by telling you the risk-of-loss for doing business with that customer.