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Overcoming the problem of Incomplete Financials in Assessing Credit Risk

A Risk Analyst frequently comes across companies with incomplete financial information which is essential for their credit assessment. To solve this problem a dual approach that takes into account both the quantity and materiality of the exposures is useful: a) When there is a large number of small exposures, it is reasonable to fill gaps by leveraging company credit score benchmarks or looking at the Country Risk Scores and Industry Risk Scores that capture the risk of doing business in a country/industry.b) When there are large exposures,  we need to employ advanced statistical techniques, tailored to the company type, industry, and region, to estimate missing financial ratios needed in our fundamentals-based models, and thus generate a credit risk score.Read more at:


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Monday, 20 January 2020
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