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Compass-Benchmark

What's behind it?

The Compass-Benchmark is a best-practice model for measuring the probability of insolvency of Austrian companies.

The database that was used for developing and validating the Compass-Benchmark comes from a multi-year history of Company Register data and has been enriched with master data such as ÖNACE code, legal form, postcode of the company’s registered office and the number of employees. In total, almost one million balance sheets on around 160,000 companies were used. On average, each company has 6.1 annual financial statements. This makes it possible for a single company to also create comparisons between different years.

All companies were also surveyed for whether they filed for insolvency, and if so, when. 4.6% of companies have an insolvency marker. The insolvent companies may have submitted several balance sheets for the model development prior to filing for insolvency. However, the balance sheets after the insolvency date are no longer relevant for the model development because these balance sheets no longer have the character of a forecast.

For the development of the Compass-Benchmark, a standard method was used, which is employed at banks in the development of rating systems. This ensures that the results of the Compass-Benchmark are comparable with the rating results of leading banks.

Full details on this can be found in the Compass-Benchmark White Paper (in German only).