Completing the credit rating system of corporate customers at Lien Viet Post Commercial Joint Stock Bank - 15

Table V.4: Scoring of non-financial information indicators of JSC A by the modified model proposed by the topic
Weighted Score
firstManagement qualifications and internal environment  20% 
1.1Judicial history of the head of the business/business ownerGood criminal record, no criminal record, no criminal record1002%2
1.2Education level of the head of the business/business ownerUniversity802%1.6
1.3Experience, executive capacity and management quality
of the Owner/Board of Directors
Management experience and quality are quite good, the leadership is stable805%4
1.4Reputation and relationship of the business owner
in the market, with relevant agencies
Normal relationship604%2.4
1.5Internal control environment, organizational structure of enterprisesInternal control processes are established but not regularly updated and checked.
Good organizational structure
1.6Internal HR environment
1.7Business strategic vision of the enterpriseHaving vision and business strategy, but feasibility in 1
some cases is still limited
2Factors outside the business  ten% 
2.1Industry development prospectsStability602%1.2
2.2Influence from policies of the State, Government, Government
local authorities
Does not have its own policy or is not heavily influenced by the government
policy (if any)

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Completing the credit rating system of corporate customers at Lien Viet Post Commercial Joint Stock Bank - 15

Table V.4: Scoring of non-financial information indicators of JSC A by the modified model proposed by the topic
Initial score
Weighted Score
2.3Stability of input materialsRelatively stable or fluctuate but little effect on business activity and profitability
2.4The likelihood of a company's products being replaced by "substitute products" as assessed
by GMOs
Relatively difficult80first%0.8
2.5The ability of new enterprises to enter the market (in the same industry/business field)
as assessed by GE
Difficult, requiring large investment of capital and labor, high qualifications80first%0.8
2.6Dependency of the activity
the enterprise's business activities on natural conditions
Very few dependencies100first%first
3Relationship with credit institutions  24% 
3.1Overdue debts/total current outstanding loans of enterprises at
credit institutions
3.2Number of times of debt restructuring, Late payment of interest, Number of times of insolvency/late payment commitments in the past 12 months at
credit institutions
0 times1004%4
3.3Debt repayment history of enterprises with
Lien Viet Bank
Always pay your debt on time1004%4
3.4Using loan capital for wrong purposes
when borrowing capital at Lien Viet Bank
Never used capital for the wrong purpose1003%3
3.5Percentage of average deposit balance (in the last 12 months) / Average outstanding balance of enterprises at Lien
Viet Bank (in the last 12 months)
3.6Average number of transactions
with Lien Viet Bank
3 - 4605%3
4Operational characteristics of the business  forty six% 
4.1Position and competitiveness of enterprises in the marketImage building in progress. Products/services have a small market share. Competitive pressure is great, competitiveness is
Table V.4: Scoring of non-financial information indicators of JSC A by the modified model proposed by the topic
Initial score
Weighted Score
4.2Scope of business
activities (scope of product consumption)
Only within Vietnam or the surrounding border area804%3.2
4.3Supplier relationshipDependent, but still able to arrange if there is a change from the supplier603%1.8
4.4Relationship with output partnersNormal relationship, both sides
need to rely on each other to develop together
4.5Financial reporting qualityHonest report, full and submitted on time but not audited
4.6Applying modern management model (ISO) and advanced technological processesDo not apply202%0.4
4.7Achievements are
widely recognized
Never received awards
from organizations
Net cash flow trends
Downtrend (
positive period net cash flows)
4.9The growth rate evaluation quarter revenue compared with the same period a year
No growth602%1.2
4.10Coverage of property
subject to loss
4.11separation of duties,
powers in the business leadership
There is separation, but it is not complete and reasonable603%1.8
4.12Medium and long-term debt repayment capacity1 time602%1.2
4.13Diversify industries
and business fields
Diversify around core areas1002%2
4.14Source of debt repayment of enterprises according to the assessment of the CBAA reliable source of debt repayment, the business is fully capable of paying its debts
on time
Total weighted score68.2
(Source: Grading according to the proposed model of the topic)
Table V.5: Summary score of corporate credit society of JSC A by the modified model proposed by the topic
STTTargetsScores are not weightedProportionPoints have been weighted
firstFinancial indicators59.230%17.8
2Forecast indicatorstwelfth30%3.6
3Non-financial indicators68.255%37.5
 total score 100%58.9
(Source: Grading according to the proposed model of the topic)

THE BLACK Swan Theory

In the past, it was believed that all swans were white. But until it was discovered that black swans exist in the world (in Australia), people gave up thinking like the white color of swans.

The Black Swan Theory by Nassim Taleb, a professor of financial mathematics at New York University, points out that, "black swans" lie beneath nearly everything about our world,  "All of us." Everyone turns a blind eye to rare events and fancies themselves to be able to predict every risk and every opportunity . Once uncertainty exists in all phenomena around us, especially in financial markets, when events of low probability of occurrence but with the potential for large losses can exist in Anywhere, should investors trust analysts' forecasts when these forecasts often fail to indicate risks of uncertainty and, as has been shown, are sometimes wrong? intentional omission.

Taleb argues that people tend to ignore large events with low probability because experts often make predictions based on associations that have been observed in the past. Economic forecasts have long been relatively accurate because people share a belief that if they do this, they will have the same results.

For example, if interest rates are lowered, people will borrow more money to do business. Taleb believes that the human brain is more suited to a simple world than the complex world we have today. Humans still tend to see, believe, and remember for a long time the facts that support our thinking, events that are consistent with our predictions about the future. But when suddenly the economic and financial crisis broke out, all values ​​were reversed, beliefs disappeared, and all predictions turned out to be wrong.

Taleb also argues that major events are more common in finance than in real life, and gives an example: “If we take randomly from the global population two people with a combined height of 3.4 m. What is the probability that each person is high? The answer “3 m and 0.4 m” is impossible and the highest probability is 1.7 m and 1.7 m. But in finance, the opposite is true. If also randomly taken from the global population two people have a combined wealth of £14 million. The most likely probability is not that each person has £7 million, but usually £5,000 on one side and £13.5 million on the other." Humans can accurately calculate to the second when there will be a solar eclipse, but also, it is impossible to predict exactly how stock prices will be tomorrow.

That's because all economic laws must be projected through the prism of human psychology and then change immeasurably like a kaleidoscope.

In finance, we humans still believe in the predictions of experts, and that's a problem called "confirmation bias". When expert predictions are made regularly and systematically, and assuming that when the market stabilizes, those expert predictions are correct, people will believe that the experts' predictions are correct. .

And then, people will always look for proofs that the statement is true, and then of course it will. When crude oil prices peaked at $147/barrel, who would say it would fall below $50 within four months? Or like in Vietnam, when VnIndex was up to 1200 points, who would have thought that it would drop below 300 points just over a year later? But when unexpected events occur, such as a financial crisis, or repeated false predictions, people begin to doubt and rebuild their propositions.

Many people in the financial world believe that financial forecasting is constantly updating new parameters to make new forecasts, not ignoring Taleb's accusations. But Taleb also said that those updates are still based on the past, so it is not possible to predict what "unusual" or "extreme" he is talking about.

The advent of the "Black Swan Theory", as well as the alarm among policymakers about the quality of credit ratings, suggest a common conclusion that financial markets (or their lives) me too) is always more complicated than we thought it would be. The sanity of new investors is the most important basis for determining their performance (not blindly trusting the ratings).

Date published: 17/11/2021
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