Contact StarMine Analytical and Methodology Support: 888-888-1082 (US)
   What is the SmartRatios Credit Risk Model (SRCR)?
   The StarMine SmartRatios Credit Risk Model is one component of the StarMine Credit Risk Model suite.

The SmartRatios Model is an intuitive and robust default prediction model that provides a view of a firmís credit condition and financial health by analyzing a wide array of accounting ratios that are predictive of credit risk. The model groups various accounting ratios, along with industry-specific metrics, into 5 components: Profitability, Liquidity, Leverage, Coverage and Growth which are combined in a logistic regression framework. The final default probability is also a function of geographical region.

the SmartRatios model significantly outperforms traditional accounting-based credit models on default prediction such as Altman Z-score and Ohlson O-score. In addition, it can provide incremental value in an equity investment strategy. Finally, it can also serve as a leading indicator of future changes in agency ratings when the SmartRatios rating and the agency rating differ significantly.

The model produces daily updated estimates of the probability of default or bankruptcy within one year for 35,000 companies globally, including Financials. The default probabilities are also mapped to traditional letter ratings and ranked to produce 1-100 percentile scores.

StarMine Help Center Welcome Page