Analyzing a company's indebtedness: an essential element in assessing default
Since 2020, we have seen a sharp rise in claims, partly due to a significant increase in financial debt.
Against a backdrop of difficult repayment of state-guaranteed loans, high interest rates and strong economic instability, a company's indebtedness to its financial partners is an essential marker for analyzing its sustainability.
As a result, taking into account the risk associated with financial debt has become crucial.
Ellisphere's answer: The Debt Index, focusing on your partners' ability to repay their financial debt.
Complementary to the default score, the Debt Index gives you a better understanding of a company's ability to repay its debt or re-leverage, and thus of its financial vulnerability.
The Debt Index is based on 2 pillars:
Thefinancial debt indicator: this uses financial data available to us to analyze the company's debt situation.
The economic efficiency indicator: this determines the company's ability, based on its business model and the evolution of its sector, to support its debt, or even to re-debt itself.
In this way, a company's financial indebtedness, once qualified, is "confronted" with its economic efficiency, enabling you to instantly determine the company's capacity to repay its debt and to be able to re-leverage to meet its deadlines or cope with an economic shock.