Risk Assessment Manager allows you to turn your credit and collection policies into an electronic score (on a scale of 10, with higher scores representing lower risk). Your RAM score is as unique as your company. Its interpretation is based on factors such as your company's risk tolerance and cost of sales; the meaning of specific scores is the accept and reject thresholds is up to you.

When creating your score card, which is what drives the RAM score, you can use Dun & Bradstreet data, customer information you import from your accounting systems as well as data you enter manually. Some D&B data is self evident (e.g. 3 suits for $1.5 Million). Other data you purchase from us has already been converted to indices (Score numbers).

This page provides keys to the most common Dun & Bradstreet scores, indices and ratings. If you have any further questions, please contact us by phone at 1.800.894.9888, by Email at cic@dnb.com or by filling out the RAM feedback Form.

Paydex Score:
This is a simple numeric score, exclusive to Dun & Bradstreet. The Paydex score is derived from the combined individual payment experiences of a business, indicating their current payment posture. These values are weighted according to the amounts of credit extended.

The Paydex Scores are updated daily, so payment changes are quickly identified.

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Key to D&B Paydex Score Quartile (Norms):
Upper Quartile Norm: The Payment Scores you see here for each quarter of the previous and current years are a representation of how the best-paying businesses (top 25%) in this industry pay their suppliers on average.
Median Norm: The Payment Scores here are a representation of how the in-between segment of the industry (middle 50%) pay their suppliers on average.
Lower Quartile Norm: The Payment Scores here show how the lower segment (last 25%) pays their suppliers on average.

'A', 'B', 'C' and 'D' Paydex Quartiles are not part of the standard RAM packet, but they are available as a custom data element for full-file monitoring within RAM.

1. - indicates a company that pays their bills faster than the Upper Norm.
2. - indicates a company that pays faster than the median, but slower than the Upper Norm.
3. - indicates a company that pays slower than the norm, but not as slowly as the Lower Norm
4. - indicates a company that pays slower than the Lower Norm.

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D&B Composite Credit Rating (Canadian):
This unique Dun & Bradstreet rating shows the financial strength and overall health of a business.

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Factors considered in Composite Credit Appraisal Ratings (1,2,3,4)
This chart contains general guidelines for delivering a Composite Credit Appraisal Rating. The various factors or conditions require often-complex balancing and weighing, taking into consideration numerous variables, before a rating can finally be determined.

Each new situation can be unique, and there are exception to almost every guideline. (In a given instance for example, one factor alone may have a significant impact on the rating assigned.) The final rating is assigned by a senior D&B Business Analyst, with exceptional cases going to our National Rating Committee for review and approval.

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* "Book" figures are required where tangible net worth is $50,000 or more, In cases where tangible net worth is under $50,000, ratings can be assigned based on estimates, preferably signed a company principal.

** "Limited" or 4th line ratings: A business is given a Limited Rating only if it has managed to operate in spite of unfavourable conditions over a significant period of time. It is often more appropriate, specially with larger, and thus more complicated concerns, to assign a blank (--) rating. The latter indicates the absence of a rating and the advisability of drawing the D&B Report for full details.

Capital Ratings (Estimated Financial Strength) are derived by what is usually a comparatively simple mathematical procedure. Determining the tangible net worth produces the Capital Rating.

General Classification Based on Estimated Strength and Composite Credit Appraisal

ER (Employee Range Designation):
Certain businesses do not lend themselves to a Dun & Bradstreet rating. Instead, these business reports carry an Employee Range (ER) designation, which is indicative of size - based on number of employees. No other significance should be attached to this classification.

FB (Foreign Branch): Indicates that the headquarters of this company is located in a foreign country (including the US). The Summary Section of the report contains the location of the headquarters.
FBN: These letters indicated on a report mean that the business is not listed in the Reference Book and that the headquarters is located in a foreign country.
NLP: These letters mean that this firm does not appear in other D&B publications.
NQ: Is a D&B rating indicating that a particular legal entity is no longer trading due to amalgamation, a buy-out, or operations having ceased (including business failure or dissolution). It is also used for businesses that D&B could not locate using the extensive investigative resources at their disposal.

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D&B Rating - United States
The American D&B Rating measures overall creditworthiness on a scale of 1 to 4, based on key credit information in D&B's
files such as payment activity, financial condition, years in business and public filings. Our creditworthiness assessment is based on both slow pay and default. And the size of a company can give you valuable insight on its credit capacity.

For those companies without current financial statements on file, we use our extensive information base to assign "1R" and "2R" ratings. These ratings are based on employee size and a "2", "3", or "4" creditworthiness indicator based on elements such as public filings, trade payments and business background. The size of a firm can give you a good indication of its credit capacity, and these Ratings have the same powerful reliability of D&B's traditional Ratings.

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D&B Rating - International

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Explanation of D&B Record:
Indicates the history of the business and its management. It may be one of the following:

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The Stability Score:
This score relates to the probability of business closure in the next six months. It is built on a scale of 0 to 10 where 0 represents lower stability (0 = more risk) and 10, higher stability (10 = less risk).

It is computed using regression analysis on the available data in D&B's information database. The 97 different variables include financial information, payment habits, legal filings, line of business, region (location) and the number of years in business. The business 'model' is validated statistically and has a 95% confidence interval.

By cross-referencing the company's score with the norms for their industry, you can gauge the relative risk of dealing with them compared to others in the same line of business.

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Standard Industrial Classification Codes (S.I.C. Codes)
This coding system categorizes a business establishment based upon the type of business activity performed at its location. This system includes all fields of economic activity, including both manufacturing and non-manufacturing operations.

The system divides economic activity into 10 major areas, identified by the first two digits on an eight-digit code.

Four and eight-digit SIC codes contain more specific descriptions of the various industrial classifications. For example:

Click here to download a 'Rich Text Format' (.rtf) version of the four-digit SIC code list. Please contact us or your D&B representative if you require the list of the eight-digit SIC codes.

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