• Measuring the credit risk of a portfolio.
• Comparing portfolios using different risk metrics.
• Assessing the relative credit risk of a customer in a portfolio using different risk assessment metrics.
• Gain in-depth understanding of the portfolio analysis result by utilizing analytical techniques, such as, 80/20 rule and basic statistical sampling measures to further segment a portfolio performance under a specific risk assessment metric.

Tactical and Strategic Benefits
The analytical techniques provided lead to clear and in-depth understanding of aggregate level risk (or portfolio risk) which in turn empowers the Credit Risk Manager to formulate effective operational and tactical plans to address observed risks.

Moreover, the in-depth understanding offered by these analytical techniques can also help open up strategic dialogues with sales, marketing and other business units on ways to optimize the overall risk of the company’s credit portfolios.

The Metrics Explained


Portfolio Exposure – Measures your exposure in terms of outstanding credit assets (Accounts Receivable or Loans and Advances) at any point in time. Helps you to be pro-active in identifying and developing appropriate financial strategies for hedging potential significant losses.

Percent Current – This is a measure of how much of your outstanding credit assets that has not fallen due for repayment. The higher the proportion of a portfolio credit asset that is current, the healthier your portfolio.

Risk Buckets – This measures the proportion of a portfolio’s credit assets in the different aging buckets. Aging buckets are specific to companies. The proportion of credit assets in the higher aging buckets could indicate the degree of credit asset collectibility concern for the company.

Risk Status – A CZ proprietary technique for measuring the operational credit risk associated with a customer’s account. Risk status can be either auto-generated (based on a company’s credit administration policy as implemented in the models) or manually assigned. Examples of risk status are collections, write-offs, disputed accounts, chapter 11, etc. The Risk Status is a very powerful feature that instantly measures the operational burden on a company of turning around a credit asset at any point in time.

Accounts past-due for review – This metric helps a company to determine its effectiveness in managing an account’s risk. A worst case of this metric usually bears a positive correlation with the poor end of the other metric measures.

Asset Quality Measure – A CZ proprietary metric for measuring the potential realizable value of a credit asset in the event of default at any point in time.

Collateral Coverage – A CZ proprietary metric for measuring how much of your credit assets is covered by the current market values of collaterals.

DSO Analysis – CreditMatrix offers you the opportunity to compute DSO on the fly and summarize the results at varying levels of detail – global, inter-portfolio, portfolio, and at accounts level. You can also save your quarterly DSO computations for use in working capital planning sessions.

Collateral Analysis – It is good enough to have collaterals but often very hard to keep tab of the collaterals and what they are worth at any point in time. Our collateral analysis provides up to date status of your collaterals at varying levels of details.

Diversification Index – A CZ proprietary metric for measuring how diversified or concentrated credit risk is within a portfolio. This is a veritable metric for advancing the course of portfolio optimization.