Free Finance Credit Risk Assessment Template

Finance Credit Risk Assessment

The purpose of this Finance Credit Risk Assessment is to evaluate the credit risk associated with our clients, customers, or counterparties. This assessment is crucial in determining the likelihood of default and potential losses to our organization.

Credit Risk Assessment Scale

  • Low Risk (1-3): Clients or counterparties with a very low likelihood of default. These entities have a strong financial position and excellent creditworthiness.

  • Moderate Risk (4-6): Clients or counterparties with a moderate likelihood of default. These entities have a reasonable financial position and satisfactory creditworthiness but may have some areas of concern.

  • High Risk (7-9): Clients or counterparties with a high likelihood of default. These entities have a weak financial position and poor creditworthiness, indicating a significant risk of non-payment.

  • Critical Risk (10): Clients or counterparties with the highest likelihood of default. These entities have an extremely weak financial position and very poor creditworthiness, posing a severe risk of non-payment.

Client Name: [Name]

Category

Score

Rationale

Financial Health

4

Stable financial position but increasing debt over the past year

Liquidity

2

Ample cash reserves to meet short-term obligations

Solvency

3

Has ability to meet long-term debt obligations

Creditworthiness

5

History of timely payments and a positive credit report

Industry/Market Factors

6

Operates in a stable industry with moderate competition

Client Name: [Name]

Category

Score

Rationale

Financial Health

Liquidity

Solvency

Creditworthiness

Industry/Market Factors

Client Name: [Name]

Category

Score

Rationale

Financial Health

Liquidity

Solvency

Creditworthiness

Industry/Market Factors

Conclusion

Based on the assessment questions, scores, and rationale provided, we categorize the credit risk for each client or counterparty using the Credit Risk Assessment Scale as follows:

Low Risk

Client B

Moderate Risk

Client A

High Risk

Client C

Critical Risk

None

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