Financial Health Rating

What is the Financial Health Rating?

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The FHR® is the cornerstone of RapidRatings. This rating is a single number from 0-100 that indicates the overall financial health of a given company at a glance and is an industry standard for determining a company’s viability.

By using 300,000+ global public and private companies across 24 industry sectors, spanning more than 3 decades to calibrate our model, the FHR is able to project reliable forecasts of the 12-month and long-term outlooks of the companies that touch your business, and predict probabilities of default with proven, high accuracy. We have eliminated the uncertainty of qualitative, market-data driven, payment history and other subjective ratings to provide the only entirely unbiased ratings system in the industry.

 

Free FHR® Report

Want to see how predictive analytics manages risks, mitigates disruptions & protects revenue loss? Request a free FHR report on any public company.

Request Report Now

The FHR...

Uses solely quantitative methods and machine learning techniques that analyze all relevant financial data

Rates private financial statements and public company filings

Accounts for differences across sector, size, strengths, and weaknesses

Financial Health is the Gateway to Understanding a Company’s Underlying Strengths and Weaknesses.

Financial health, a measure of a company’s financial viability, operational efficiency, and resilience, is the gateway to understanding the company’s underlying strengths and weaknesses. The 0-100 numeric score provides a universal benchmark for choosing whom to partner with in the short- and long-term, enabling all risk areas to speak one single language for business decisions. A company’s financial health is an accurate and predictive key performance indicator (KPI), instrumental to determining how it will perform as a business partner (vendor, supplier, credit counterparty, or other third party). Financial health provides forward-looking visibility into a company’s ability to grow with you when business is good, weather unforeseen disruptions as they arise, and its capacity to invest in infrastructure and resources, both financial and non-financial.

 

 

 

What Does It Mean to Evaluate Financial Health?

Financial health is often used to describe many different types of ratings and analytics, but at its core, financial health means evaluating a company’s financial statements.  The financial statements alone can reveal many aspects of a company, including:

financial dialogue icon
  • Profitability
  • Operating Efficiency
  • Earnings
  • Liquidity
  • Leverage
  • Debt Coverage
  • Probability of Default (12 months to 10 years)

The financial health of a company does not include share price or market inputs, which are a reflection of investor sentiment rather than a company’s financial strength.

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Financial Health Helps You Navigate the Complexity of Third-Party Business Relationships.

How can financial health help you make better business decisions with your third parties, including suppliers, vendors, counterparties, and other business partners?

  • Provide early warnings of future performance or potential disruption issues before they occur
  • Support strategic decision-making to take risk mitigation action and/or adjust your business relationship strategy
  • Help identify which existing third parties are most capable of improving their performance
  • Select businesses at the procurement or sourcing stage that are most likely to contribute positive performance where you have no relationship history
  • Act as a universal metric to create a common language for managing risk across your enterprise
  • Build better relationships with third parties due to increased transparency and work together towards a shared goal
  • Understand third parties that can both react to unexpected risk events and proactively prevent potential issues
  • Shape your supplier, third party, and vendor relationship strategy

 

 

 

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