Table 1 Description of SMEs’ credit risk assessment based on SCF
From: A credit risk assessment model based on SVM for small and medium enterprises in supply chain finance
First level index | Second level index | Third level index | Index description |
|---|---|---|---|
Industry status | Macro environment | Macroeconomic situation | Economic development stage (growth trend of GDP) |
Legal policy environment | Relevant laws and regulations and preferential policies | ||
The prospects of Industry development | The industry development stage | Belongs to the emerging, developing, mature or recession stage | |
The intensity of the industry competition | Competition intensity | ||
SME credit conditions | Enterprise basic quality | Enterprise management status | The degree of authorization, the major managers’ average working years, the stability of main leaders, organizational corporate governance structure |
Quality of employees | Level of education, working experience | ||
The enterprise scale | Log (main business income) | ||
Profitability | Return on equity | The total net income/average total net assets | |
Return on sales | Sales profit/sales revenue | ||
Operations ability | Accounts receivable turnover | Log (net sales/average accounts receivable balances) | |
Inventory turnover | Log (cost sale/average inventory) | ||
The credit cycle | Log (credit days/365) | ||
Growth rate of sales | The growth of revenue sales for the current period/last year | ||
Short-term debt | Activity ratios | Liquidity assets - inventory/ Liquidity liabilities | |
Interest coverage ratio | Earnings Before Interest and Tax/interest expense | ||
Fixed-charge coverage ratio | (Earnings before interest and tax + fixed fee)/(fixed fee + interest rate) | ||
Debt asset ratio | Total debt/total assets | ||
Long-term debt | Fit ratio of long-term assets | (The owners’ equity + Long-term debt)/(Fixed assets + long-term investments) | |
Credit record | Performance of the past | Whether or not breach of contract | |
Leading enterprise credit conditions | Profitability | Return on equity | The total net income/average total net assets |
Sales profit ratio | Sales profit/sales revenue | ||
Short-term debt | Activity ratios | Liquidity assets - inventory/ Liquidity liabilities | |
Fixed-charge coverage ratio | (Earnings before interest and tax + fixed fee)/(fixed fee + interest rate) | ||
Credit conditions | Guaranty conditions | Dispersion of the secured amount, secured company’s strength | |
The status of cooperative relationships | Relationship strength (Wu & Gu, 2008) | The intensity of contract | Whether the two sides have long-term contracts |
Commitment | Maintain long-term willingness to cooperate | ||
Relationship quality (Walter et al. 2003) | Managers ’ personal relationships | Personal relationships between core enterprises and SMEs’ main managers | |
Personal relationships | Private relationships between core enterprise and financing enterprise employees | ||
Relationship durability (Anderson et al. 1994) | Cooperation time | The lenity of cooperation time | |
SME status in supply chain | The price advantage and product substitutability | Price advantage compared to the average market price | |
The degree of homogeneity of the products on the market |