The use of credit scoring systems in measuring credibility : the case of greek companies
Credit risk is crucial for all companies and privates. It was obvious especially in period of 2008-2010, when many developed economies experienced a recession, due to financial crisis. In the relevant literature, among the suggested methodologies to measure and manage this kind of risk, credit scoring models are included. They usually utilize accounting data, which convey crucial information about vital functions of a company. In the current study, we tried to record the most popular methodologies as well as to indirectly test the relevance of liquidity, profitability and capital structure to credit risk. More particularly, given that liquid, profitable and properly funded companies convey less credit, we assumed that such companies should exhibit a satisfactory performance. We assumed therefore, that liquidity, profitability and capital structure should be strongly related to a company’s common return. Analyzing the data of 80 companies, listed in the Athens Stock Exchange, we concluded that the above assumption didn’t hold, at least for the period under study (2000-2007).