China-based property developer Tahoe Group Co., Ltd is providing evidence that the real estate bubble has resulted in ballooning inventories and distorted balance sheets, leaving less capitalized peers to struggle in an overly distended industry.
In late January, the company announced an expectation net losses exceeding ¥5 billion in 2020, juxtaposed against a profit of ¥466.4 million in 2019. Tahoe Group's FRISK® score, incidentally, has sunk to a "1."
The proprietary CreditRiskMonitor FRISK® score is proven 96% accurate in predicting bankruptcy risk in public companies with a 12-month forward-looking horizon. More than 35% of the Fortune 1000 rely upon our company to stay ahead of this risk day in and day out.
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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.