Trustpilot

Probability of Distress

The “Probability of Distress” (PoD) refers to the likelihood that a company will experience financial distress or fail to meet its financial obligations within a year. It indicates the statistical chance of a company facing failure or significant financial restructuring within the next year. This metric assesses the level of risk associated with the company’s financial health and stability and is calculated by integrating the company’s health score with the current economic conditions.

This tab focusses on analysing the probability of distress (PoD) among suppliers. The top graph visually represents the movement of PoD over the last three months, with suppliers’ positions indicating changes in their distress probability. Suppliers in the right quadrant with increased PoD require special attention.The bottom table compliments the graph by offering detailed financial and distress-related information about each supplier. This includes their credit limit, health score, actual PoD, company status, turnover and supply chain participation.

The combination of the graph and the table allows users to quickly identify suppliers with changing distress probabilities and provides a comprehensive view of their financial health.This tab assists users in making informed decisions about supplier relationships based on their probability of distress.

Probability of Distress (PoD) Movement Graph Monitoring PoD movement is crucial for early detection of financial distress among suppliers. Suppliers with increasing PoD levels are potential sources of risk in the supply chain. Identifying them allows for proactive risk mitigation measures, such as diversifying suppliers or seeking alternative sources to reduce the impact of disruptions caused by financially distressed suppliers.

Supplier Details Table Access to comprehensive supplier information is essential for risk assessment and mitigation. It enables you to make informed decisions about supplier relationships based on their probability of distress. By reviewing detailed financial data and PoD, you can prioritise supplier engagement, allocate resources effectively, and take proactive steps to address financial risks within the supply chain.

Quick Identification of Suppliers with Changing Distress Probabilities Quick identification is key to proactive risk mitigation. It enables you to focus your attention on suppliers that are potentially becoming financially unstable. By addressing issues with these suppliers promptly, you can reduce the risk of supply chain disruptions caused by financially distressed suppliers.

Informed Decision-Making Informed decision-making is fundamental to risk mitigation. You can use the information presented to assess the financial health and stability of your suppliers. This allows for strategic supplier selection, negotiation of favorable terms, and the development of contingency plans to mitigate potential disruptions in the supply chain.

In summary, this tab provides critical insights into the financial health of suppliers, particularly their probability of distress. It empowers you to proactively manage risks by identifying suppliers with changing distress probabilities and making informed decisions to ensure the resilience and stability of your supply chain.