Birthday
Yesterday was my birthday and I'm grateful for having received everything that I wanted. My parents gave me their first blessing at midnight, my nephew sang a birthday song for me in the morning, my husband took me to a dim sum place for brunch, the Romanian consulate officers gave me my Romanian visa at noon, my husband bought me the iPod's 5th generation in the afternoon, and I got my tickets to fly to Cluj-Napoca in the evening. What more do you want on the day of your birthday?
posted by Elisa at
4:48 PM
1 Comments:
Dear Elisa :
Suppose one could identify
Enron, Parmalat, Ahold at least
two years beforehand. Follow
the undermentioned story that I
like to share with you.
The OK-Score
The OK-Score is a new business classification, able to provide a very solid indication of a company's financial position. Even better, it can make a prediction of how the company will fare in the near future (two years). The company can use this classification as a warning, take action during this time and adapt its course. The classification model was invented by Mr. Willem D. Okkerse MBA (born in 1946 and very well experienced in strategics and corporate finance, now CEO of the Association for International Top Level Creditrating) when he did financial research for his thesis to take his Doctors Degree at the University of Amsterdam.
The research aimed for a comparison of and a better alternative for business ratio's like Professor Altman's Z-score and Professor Bilderbeek's Tubantian test (in Dutch: Twente-toets). Not only the method of the OK-Score model was different in character and approach; most of all its reliability proved to be significantly bigger. Socalled doubly blind samples supervised by a notary yielded startling results, like a 100% reliability type I error and a 82% accuracy type II error which even went up to 97% after lifting the blind filter of the business type.
However, publishing the thesis, imperative for taking the degree, would have implied the disclosure of the underlying model. This would have severely hindered its successful marketing. Therefore Mr. Okkerse decided not to take his degree and commit himself to a knock-out promotion of the OK-Score. Many publications testifying of its success followed, leading to, among other things, Mr. Okkerse's membership of the Institute of Forensic Auditors in Brussels.
The OK-Score is generated by comparison of two business variables. The first, the OK-Solvency, is an adaptation of the well known solvency ratio or debt-equity ratio. The adaptation considers the quality and annual increase of debtors and makes a reservation for mismatching stocks. It also looks at the industry the company is dealing with. The second variable, the OK-ratio, is a new business ratio that requires the input of the company's last five years figures. This ratio estimates if there is any corrosion of the stakeholders' interests. This relates to a ratio of dissipation which determines the range for repair or improvement.
The OK-Solvency-ratio and the OK-ratio are set out against each other in an ordinally correlating table with cells in which the values or classes of the OK-Score are figured from 1 tot 10.
A class 1 company enjoys an almost perfect security and has a lot of room for expansion, even with more liabilities. A class 10 company on the other hand is in very bad weather and runs a severe risk to go bankrupt within the next two years. In between there is range of alternatives that gradually dissuade companies from expansion with more liabilities.
By now all the Amsterdam Stock Exchange companies, listed on the AEX (with the exception of the financials and real estate companies) have successfully been put to the test (the Eurostoxx 50 will follow early 2007) and investors can use the OK-Score to estimate the future results of their investments.
Investors with a minimum capital of Euro 100.000 can do so via www.todaysbeheer.nl. Investors that bring in an amount of at least Euro 2.500 can invest with the OK-philosophy by way of www.tradingport.nl. Others interested can contact the Association for International Top Level Creditrating via OK-Score's website: www.ok-score.nl.
Proven records - even in TV-interviews can be presented.
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