The D&B Standard Guidelines
In the D&B Standard Guidelines you find practical help and
support concerning the interpretation of your D&B Standard.

Rating CodesLimitSpecial EventsCredit Profile History/Operation
Shareholder/ManagementFinanceAbility to Pay
Payment remarks - ExplanationsAnalysis of Key Ratios

Generally, the following is found in D&B reports:
Name of the Business
Mailing address, zip code and post office
Telephone and fax numbers
Business organization (tax) number
D-U-N-S number
VAT-number
Business legal form -Click here to read more about business legal forms.

A D&B Standard report consists of a Business's rating, limit, component evaluation, and, in the case of Swedish and Norwegian companies, a rating history, as well.

We recommend a D&B Standard report when you want to check an existing customer, or when you are dealing with a new customer and a credit limit in excess of 50,000 SEK.

The following rating codes can appear in a D&B Standard report:

Companies not included in the rating system may receive the following code:
NR Not rated

Finland:
A Finnish Business which has not submitted its annual reports, and whose rating is based on its payment score, cannot receive a higher rating than A.

Norway:
A Norwegian sole proprietorship cannot receive a higher rating than AA.

Sweden:
Sole proprietorships, partnerships or limited partnerships cannot receive a higher rating than AA.

A limit is stated for each company with a rating of AAA, AA and A. The limit model used is based on both the companys's cash flow and shareholder equity.

The following limitations apply:

General:

Danmark:
Limit not to exceed 50,000 tdkk.

Norway:
Companies with turnover of less than one million NOK are not given a limit. Companies with primary industry codes of 6100, 6110, 6120, 7010, 7020 and 7415 (shipping, property and holding management) are not given any limit either.

If a special event concerning a company has been registered, this will affect the companys's rating. Examples of special events include: suspension of payments, negotiations with creditors, merger, changes in the Board of Directors and/or auditors, etc.

Credit Profile - Sweden

The information used in our rating system is grouped and categorized in the following groups (each Credit Profile is evaluated separately): Click here to read about Credit Profiles in the rest of Scandinavia.

History/Operation
Shareholders/management
Finances
Solvency

Finland
Although information about key personnel is used in assessing companies, that information does not appear in the reports.

Norway
Equity structure:
A classification of the Business's owners using the following scale:
Foreign owned
General limited liability corporation, not publicly traded
Owned by a Business
Owned by individuals
Owned by combination
Owned by governmental entity
Unknown

Duty to report
A company either owned by individuals or one whose equity structure is unknown, and in cases where there are payment remarks regarding directors or the CEO (which information is used in the rating model), a copy is to be sent to the persons to whom the information relates, including the name of the party requesting the inquiry.

Sweden
If the company has a estimated shareholder equity of less than 500,000 SEK, information regarding directors will be used in evaluating the company.

Turnover:
The total sales income, rental income and miscellaneous income of a Business.

Profit or loss before taxes:
The profit or loss before taxes, i.e. after both financial income/expenses, including extraordinary income/expenses [sic]

Estimated shareholders' equity:
Book value of shareholders' equity + 70% of untaxed reserves.

Total assets:
The Business's total asses, current and capital assets [sic]

Total number of employees:
The total number of employees of the Business on the date of the annual reports.

Solvency:
Estimated shareholders' equity as a percentage of total capital.

Quick asset ratio:
Current assets minus inventory as a percentage of short-term liabilities.

Current ratio:
Current assets as a percentage of short-term liabilities.

Profit ratio:
Profit or loss as a percentage of volume. The profit ratio is a good, simple measurement of how large a percentage of volume is represented by the profit or loss before tax expenses. A negative profit ratio means that the Business is generating a loss.

Return on total capital, RT:
Profit or loss after financial items plus financial expenses as a percentage of total capital.

Denmark
Debt collection cases are shown in the reports.

Finland
Payment remarks:
Draft protests
Injunctions to pay
Decisions in legal proceeding
Collection information is used in the rating model, but does not appear in the reports.

Paydex
Paydex is an international index which expresses a company's payment record in number of days.

D&B Finland OY continually compiles electronic information regarding payment records from many suppliers. Paydex is obtainable in cases where a large enough number of analyzed invoices is available.

The Paydex for a company which pays on the due date is 80. The average delay in payment is calculated by subtracting the company's  Paydex from Paydex 80, e.g. 80-65 = 15 days' delayed payment.

Norway
Payment remarks:
Collection matters
Compromises with creditors
Execution
Insolvency

Sweden
Applications:
Applications for injunctions to pay.

Payment remarks:
Final injunctions to pay
Execution
Judgment

Finland
Injunctions to pay
Documents are submitted to the enforcement agency that verified the claim.

Commencing legal action
The document is sent to the district court which has confirmed the demand.

Protest of draft/bill of exchange
Protest of a draft or bill of exchange which has fallen due is made before a Notary Public.

Norway
Collection
A demand for payment has been sent by a collection agent (not a civil action).

Arbitrated compromise
A judgment made by an arbitration panel, based on written submissions. The debtor’s liability to pay the creditor is determined.

Execution
Execution following an arbitrated compromise judgment, etc.

Insolvency
There are no assets which can be attached/executed on.

Sweden
Application for an injunction to pay
Documentation which is sent to the sheriff in order to determine the amount of a claim.

Final order/decision to issue an injunction to pay, judgment in a civil action, default judgment
Document sent to the sheriff or district court which has determined the claim.

Taxes or fees owed
Taxes or fees have not been paid on time, and the tax authorities have therefore referred the matter to the sheriff for collection.

Protest of bill of exchange
Protest of a bill of exchange is made before a Notary Public.

Return Financing Liquidity

Our D&B Standard report includes excerpts from the Business’s three most recent annual reports submitted. On the basis of the accounting items available, we have calculated key ratios for the Business, and these form the basis of our Business evaluation.

Our evaluation of the accounts is divided into three parts. We evaluate return, financing and liquidity. However, the evaluation may vary somewhat between the various countries, since some items are not recorded or not available, For example, Danish companies are not required to report volume for reasons relating to competition.

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Return
Profit Ratio:
Profit or loss before taxes, as a percent of volume.

The profit ratio is a good, simple measurement of how large a percentage of volume the profit or loss before tax expenses is. A negative profit ratio means that the Business is generating a loss.

Return on total capital, RT
Profit or loss after financial items plus financial expenses as a percentage of total capital.

Return on total capital measures the business’s return (profitability) on the tied-up capital invested in the business. Considering this key ratio in isolation may give a distorted picture in the case of business with high financial expenses. We recommend that (RT) be used together with the interest cover.

Return on shareholders’ equity before tax. RE
Profit or loss after financial items as a percentage of estimated shareholders' capital.

The (RE) measures the return shareholders receive on their invested capital (risk capital). Considered in isolation, this measurement may give a distorted picture. A Business which has used up part of its shareholders’ capital may show a high yield on shareholder capital, according to the formula.

Interest coverage
The profit or loss after financial items plus financial expenses, divided by financial expenses. The interest cover shows how many times the profit and financial income covers the financial expenses. When considering this key ratio, one often speaks of the "three times rule." According to this rule, the financial expenses should not exceed 1/3 of the operating profit + financial income.

Cost of outside capital
The financial expenses as a percentage of the total debt. The cost of outside capital shows how much the Business pays for the borrowed capital, both long-term and short-term debt.

Risk buffer (RT-RS)
The yield on total capital minus the average interest on debt. If the risk buffer is positive, return on shareholder equity will be higher at a high debt-to-equity ratio, than at a lower one.

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Financing:
Solvency
Estimated shareholders’ equity as a percentage of total capital.

Solvency is a measurement showing how large a portion of the shareholders’ equity is present in the Business. Shareholders’ equity is viewed in relation to total capital. A negative shareholders’ equity indicates that the entire share capital has been used up, and that the Business is being operating on negative shareholders’ equity.

Loss buffer
The estimated shareholders’ capital as a percentage of the Business’s volume. The loss buffer is also a measure of how much shareholders’ equity there is in the Business. The loss buffer measures shareholders’ equity in relation to volume. If we assume that next year’s volume will be like last year’s, the loss buffer will show how much of a deficit one can have, as a percentage of the volume, before all shareholders’ equity is used up.

Debt-to-equity ratio (S/E)
Total debts divided by the estimated shareholders’ equity

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Liquidity

Quick asset ratio (acid test)
Current assets less inventory, as a percentage of short-term liabilities.

Current ratio
Current assets as a percentage of short-term liabilities.

Working capital
Current assets less short-term debts.

Working capital is a measure of how large current assets are in relation to short-term debts. If the short-term debts are greater than current assets, the company is operating with a negative working capital. This indicates strained liquidity.