What works and what doesn't in financial risk

Craig Evans, CEO

The last three years have been some of the most turbulent in living memory. With Brexit, the pandemic, and the war in Ukraine hitting businesses in quick succession, you’d be forgiven for feeling like the world is lurching from one crisis to another.

This uncertainty looks set to continue. The markets are giving off mixed signals, and a lack of clarity around government energy assistance is adding to the confusion. Many businesses are stuck in limbo, unsure if they should be preparing for a modest recovery or a full-blown recession.

Against this backdrop, it’s tempting to view risk assessment as a fool's errand. How can you predict the future in a world where once-in-a-lifetime shocks seem to be happening every year? 

This feeling is understandable, but misguided. As the world grows more uncertain, forecasting risk is more important than ever. Rather than giving up, we need to find ways to make predictions that won’t crumble in the face of unforeseen events. This is where we can help.

▶️ Did you miss Craig’s webinar on managing risk? You can watch it again here

Time for a new approach

Traditional methods of risk assessment have their place, but they don’t provide the whole picture. A standard credit check will only look at a company’s current finances and immediate customer base. This will flag up obvious risks but may miss weaknesses further along the supply chain.

The key is to look at the bigger picture. The businesses you deal with may be well-equipped to cope with market shocks, but what about the businesses they deal with? To truly gauge a company’s stability, you need to look at its customers’ customers and its suppliers’ suppliers. Only then can you be sure that your money is in safe hands.

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Leave no stone unturned

When it comes to assessing risk, the problem isn’t a lack of information. Detailed reports are available on the Company’s House website, but finding the relevant data is easier said than done. Reports are uploaded as PDFs, leaving you no choice but to sift through each document manually. Doing this for one company is a chore. Doing it for a whole supply chain is nothing short of an ordeal. 

This had been a problem for years and, frankly, we were sick of it. That’s why we created SearCHeD. This simple tool turns thousands of Companies House PDFs into searchable documents, letting you find the information you need in a fraction of the time:

• Find every document relating to a specific company simply by typing the company name into the search bar. 🔎

• Use keyword search to look for specific signs of distress, either within a given company or across your entire portfolio. 📈

• Search for keywords across all companies in the database to spot emerging risk patterns in your industry. 👀

• Create reports at the click of a button by downloading search results as a PDF, Excel spreadsheet or CSV file. 🖨️

Better data means better predictions 

SearCHeD gives you a detailed picture of a company's present situation. The next step is using this data to make accurate predictions about the future. This is where our customers really start to see the value of our service:

• Our dashboard lets you simulate a wide range of financial scenarios. You can select anything from a margin squeeze to customer insolvency and see immediately how it would affect a company’s H-Score®. You can compare this to the industry average to judge how well the company would fare in relation to the competition.

• Custom Forecast View lets you customise these models in any way you choose. Simply move the sliders to adjust various financial pressures and create a tailor-made risk forecast. 

• If you want to delve even deeper, our Experiment feature lets you add your own figures. You can use actual numbers from company reports to create an even more accurate risk profile. 

There’s no such thing as a perfect prediction, but there’s a big difference between an educated guess and a stab in the dark. We put company data at your fingertips so that you can spot the risks that others miss.

Arrange a free trial today, and discover how Company Watch can help you minimise risk.

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Disclaimer- The past performance of a company is not always an indicator of future success. Read our terms and conditions here.