Peril in Paris: Air France-KLM SA is facing a mighty headwind now with the COVID-19 pandemic raging. The airliner's FRISK® score has dipped throughout 2020.
According to Bloomberg, Air France-KLM "posted a record quarterly loss in July and is predicting 'significantly negative' earnings in the second half. European travel picked up over the past months after governments relaxed lockdown measures, though the pace of recovery has been slowed by renewed outbreaks in several parts of the continent."
Air France-KLM's FRISK® score is currently at a "1," indicating extreme financial risk:
The FRISK® score is a proprietary score indicating a company's level of financial stress, based on the probability of bankruptcy over a 12-month horizon. The FRISK® score incorporates a number of critical risk indicators including:
- crowdsourced click patterns of credit managers and other subscribers,
- stock market capitalization and volatility,
- financial ratios, including those used in the Altman Z”-Score model, and
- Moody’s, Fitch and DBRS Morningstar bond agency ratings
The FRISK® score is calculated daily with the most recent information in the CreditRiskMonitor database.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at more than 35% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About High Risk Reports
Our High Risk Reports feature companies that are exhibiting a significantly high level of financial distress, as indicated by our proprietary FRISK® score.
The reports highlight the factors that have pushed a company's score lower on the "1" (worst) to "10" (best) FRISK® score, which is 96% accurate in predicting bankruptcy over a 12-month period. The High Risk Reports also includes analysis on financial indicators such as the company’s DBT index, stock performance, financial ratios and how it is performing relative to its industry peers.
The ultimate goal of the High Risk Report series is two-part: provide an early warning for those doing business with an increasingly distressed company and inform of the many signals that should be examined when assessing financial risks.