Altman Z-Score
A multi-factor bankruptcy prediction model combining five financial ratios into a single score.
Counterparty Risk
The risk that the other party in a financial transaction fails to fulfill their contractual obligations.
Credit Bureau
A company that collects consumer credit histories and provides credit reports and scores to lenders for underwriting decisions.
Credit Rating
An assessment of a borrower's creditworthiness and likelihood of default, issued by rating agencies such as Moody's, S&P, and Fitch.
Credit Risk
The probability that a borrower or counterparty will fail to meet its financial obligations.
Default Risk
The probability that a borrower will fail to make scheduled debt payments, exposing creditors to loss.
Default
The failure of a borrower to make scheduled debt payments or fulfill other obligations under a loan agreement.
Non-Performing Loan
A bank loan on which the borrower has stopped making scheduled payments, typically defined as 90 or more days past due.
Piotroski F-Score
A 9-point scoring system that grades a company's financial health across profitability, leverage, and efficiency.
Recovery Rate
The proportion of a defaulted debt's face value that creditors can expect to recover through bankruptcy proceedings or restructuring.