The creditworthiness of a partner or a customer shall be the first element to check before finalizing a partnership.
However it should not be limited to the study of past and present balance sheets. It is necessary to anticipate future development within the target, its environment and management in order to better anticipate risks and ‘black swans’.
Analysis of the past, present and projection into the future
The past :
– Financial accounts
– Payment history
– History of disputes
– Past investment performance
The present :
– Reputation, references
– Economic activity
– Compliance with standards and practices
– Quality of a product, service
The future :
– Team’s capability for projection
– Validation of a business plan
– Legal commitments and contracts
– Business and operational synergies
– Ability to turn R & D into Innovation
It is necessary to conduct interviewes , regardless the country or jurisdiction.
It is necessary to source locally when business registers, and court registries are not publicly available.
ABI has an excellent network of sources on the ground in countries where the information can sometimes be difficult to access.