Group Score: risk analysis becomes systemic

In today’s economic landscape—marked by growing complexity and increasingly dense interconnections among companies—focusing solely on the health of a single entity is no longer sufficient. Every company is a node within a network, and its stability inevitably depends on that of the entities that surround it, control it, or hold stakes in it. At Modefinance, staying true to our mission of making financial analysis transparent, linear, and data-driven, we have developed the Group Score.

This tool stems from the need to move beyond a granular view of risk and embrace a systemic one—capable of capturing not only the target company, but the entire group perimeter that revolves around it.

The Group Score is an advanced model that extends the power of our traditional MORE Score. While the latter assesses the solvency of a single company based on its financial statements, the Group Score aggregates these assessments to determine the financial health of an entire corporate group.

In essence, it is a weighted average of the MORE Scores of the relevant companies that make up the group. The final score reflects the impact that parent companies and subsidiaries have on the main entity, providing a comprehensive overview that helps prevent unpleasant surprises caused by crises or insolvencies hidden within the corporate chain.

1. Eligible legal form: The score is calculated exclusively for limited liability companies (SpA or Srl), as these entities publish financial statements that can be analyzed.

2. Ownership thresholds: The model considers companies with an ownership or control stake equal to or greater than 20%. Lower stakes are excluded, as they are deemed insufficiently influential on the group’s overall management.
3. The concept of weight: Not all shareholdings carry the same importance. The weight of each company in the Group Score calculation is determined by its revenue multiplied by the percentage of ownership or control. For holding companies, the model takes financial income into account.

The Group Score output is delivered through two types of tables, offering different levels of insight:

• Global summary: Displays the numerical score and the corresponding rating label (e.g., “B”). Warning messages are crucial, alerting users to specific situations such as missing ATECO codes or the presence of negative factors detected in the main entity.
• Company-level detail: An analytical table listing each individual company in the group with its respective MORE Score and, most importantly, the weighted MORE Score. This field is critical, as it shows exactly how much the financial health of that specific subsidiary or parent company is pulling the overall group score up or down.

Integrating the Group Score into the workflows of banks, investors, and credit professionals addresses three fundamental needs:

Qualitative integration with ECAI Ratings

In Credit Rating processes—especially in large-scale assessments—the Group Score enables partial automation of qualitative analysis. It provides analysts with a quick, objective indication of the solidity of the environment in which the assessed company operates, allowing them to better calibrate the final judgment without manually analyzing every single subsidiary.

Direct and comparative assessment

The model allows for an immediate comparison between the target company’s score and that of its group. If the company is healthy but the group is deteriorating, overall risk increases dramatically. Conversely, a solid group can act as a protective buffer for a subsidiary experiencing temporary difficulties.

Governance and Risk Management

Increasingly, a company’s health is inseparable from its governance. The Group Score makes it possible to assess how ownership structure influences credit risk, offering decision support based on clear, indisputable numerical evidence.

At Modefinance, we believe that simplicity is the ultimate sophistication. With the Group Score, we have transformed a complex corporate architecture into a clear, accessible, and actionable data point.

Looking “beyond the balance sheet” is no longer just a strategic choice—it is an operational necessity. Understanding whether a company is solid today first and foremost means understanding whether the ground it stands on is equally stable. The Group Score is the tool that makes this possible, combining data precision with a holistic perspective.

Are you interested in more information and/or a demo?