Credit Scoring for the Supermarket and Retailing Industry: Analysis and Application Proposal
European Accounting and Management Review
This paper develops and tests a credit scoring model focused on the supermarket and retailing industry which can help financial institutions in assessing credit requests coming from customers belonging to these industries category. The empirical study has the objective of answering two questions: (1) Which ratios better discriminate the companies based on their being solvent or insolvent? (2) What is the relative importance of these ratios? To do this, several statistical techniques with a
... hniques with a multifactorial focus have been applied. The overall approach is the same as the one in Altman (1968) , but the application of the design as well as the purpose of it are different. Through the application of several statistical techniques, the credit scoring model has been proved to be effective in assessing credit scoring applications within the supermarket and retailing industry under certain conditions. KEYWORDS Credit scoring, Supermarket and retailing industry. JEL Codes: M14, M41. 1 The authors would like to thank Andrea Fabiani for his contribution to the statistical development of the model.