In short
The Pre-Financial Score rates the credit risk of young Norwegian capital companies — AS and ASA — that have not yet published their first annual accounts.
With no financial statement to read, the model works from what the registers tell us about a company's early life. 27,205 active Norwegian companies move from having no score to having one. This is a new assessment, not a replacement for anything you already use.
Norway is the second market to get the model, after Denmark.
Which companies get a score
A company is scored from the day it is entered in Foretaksregisteret, the Norwegian register of business enterprises, and re-scored every six months.
As soon as it files its first annual accounts, it moves automatically to our established Financial or Holding model. For most companies that happens fairly quickly: half of all Norwegian companies file within 11 months of registration, and nine in ten within 17 months.
The Pre-Financial Score is therefore a temporary assessment that covers the gap between incorporation and the first set of accounts.
What the model looks at
Seven signals, drawn from the company registers rather than from accounts. Company age is by far the strongest single signal, but the other six materially shape where a company lands.
1. Company age
The strongest signal — and one that needs explaining, because it means something different in Norway than in Denmark.
For a company with no published accounts, age effectively measures how overdue its first filing is. Norwegian annual accounts are due to Regnskapsregisteret by 31 July, and companies that fail to file are struck off by Brønnøysundregistrene through tvangsoppløsning — compulsory dissolution — in an enforcement round each spring.
Age is therefore a direct measure of how far through that cycle a company has travelled. A company that has gone quiet well past its deadline warrants a closer look.
2. Industry
The broad sector the company operates in. Some sectors carry structurally higher early-stage failure rates.
3. Industry risk level
A finer measure of the historical distress rate in the company's specific line of business.
4. Registered capital
The share capital the owners have committed. Norwegian AS companies must register a minimum, and companies sitting at the floor behave differently from those capitalised well above it.
5. Board size
The number of registered directors. A single-director company carries measurably more risk than one with a wider board.
6. VAT registration
Whether the company appears in Merverdiavgiftsregisteret, the Norwegian VAT register.
Note that this signal works the opposite way to what you might expect: at this stage of a company's life, VAT registration raises risk rather than lowering it. A company with customers, suppliers and tax obligations has something to default on. A dormant one does not.
7. Name changes
How often the company has changed its registered name since incorporation. Companies that rebrand in their first months score consistently lower than those that do not.
How to read the score
The score uses the same 1–10 scale as our other BOHR models, where 1 is the highest risk and 10 the lowest. The same number means the same level of risk in each model, so they can be read side by side.
Distribution at launch
Score 1 — 2.5%
Score 2 — 0.9%
Score 3 — 1.2%
Score 4 — 2.9%
Score 5 — 8.2%
Score 6 — 14.7%
Score 7 — 26.0%
Score 8 — 39.2%
Score 9 — 4.6%
Score 10 — 0.0%
High risk (scores 1–3) — 4.7%
Medium risk (scores 4–6) — 25.7%
Low risk (scores 7–10) — 69.6%
Why the distribution sits high
Two things explain it.
First, Norway enforces its filing deadline, so most companies leave this population quickly. 62% of the companies scored are less than six months old — an age at which they are genuinely low risk. The high-risk tail is small, but severe.
Second, the top score of 10 is reserved for established companies with a proven financial track record. A company without accounts does not reach it, however good it looks on the other parameters.
How accurate is the model
The model has an AUC of 0.87. That means it ranks a riskier company above a safer one 87% of the time.
Taken as a whole, this population is about twice as likely to enter bankruptcy or forced closure within a year as a company that has already filed accounts.
It is worth holding on to the fact that a score is decision support, not a guarantee of future outcomes. That applies to all our models, but it matters particularly here, where the basis is register data rather than financial figures.
What happens when the company files
When a company files its first annual accounts and moves to the Financial or Holding model, its score most often improves.
Across a simulation of past transitions:
- 62% of companies scored higher
- 19% were unchanged
- 19% scored lower
Movements are small in either direction. Half of all companies shift by one point or less, three-quarters by two or less. Large moves are almost exclusively upward: among companies whose score changed by four points or more, nine in ten improved.
In other words, a pre-financial score is not a verdict. It is a starting point, and most companies look better once the numbers finally arrive.
How the Norwegian and Danish models differ
The two models share a name and a purpose, but they are not identical. If you work across both markets, the difference is worth knowing.
- Company types — Denmark: ApS and A/S · Norway: AS and ASA
- Number of parameters — Denmark: 6 · Norway: 7
- AUC — Denmark: 0.77 · Norway: 0.87
- Re-scoring — Denmark: Every six months · Norway: Every six months
The shared parameters are company age, industry, industry risk level and registered capital.
Only in the Danish model: connected bankruptcies and employee count.
Only in the Norwegian model: board size, VAT registration and name changes.
The difference comes down to the two countries' registers holding different information, and to the fact that what predicts distress is not identical across markets. The Norwegian model's higher AUC is partly because the enforced filing deadline makes company age a sharper signal in Norway than in Denmark.
Using the score in practice
Read it for what it is. A pre-financial score rests on less information than a score for a company with filed accounts. It is validated and it is sound within its basis, but it does not tell you what a full financial analysis would.
Pay attention to the age behind the score. A brand-new company with a good score looks good because it has not yet had the opportunity to do anything wrong. A company still without accounts long after the deadline is a different matter — there, the age is actively telling you something.
Scale the credit to the uncertainty. Many of our customers start new companies on a modest credit limit and raise it once there is payment history to read. The model does not replace that approach; it gives you a better starting point for it.
Watch the hand-off. When the company files its first accounts it switches model, and the score may move. If you have the company on a monitoring list, you will be notified when that happens.
Build it into your credit policy. The score sits alongside our other scores, so you can set criteria for Norwegian companies without accounts in exactly the same way as for any other company.
Risika Pre-Financial Score · Norway · model v1.0.0
Company counts, score distributions and comparative figures describe the scored population at a point in time. They shift as companies register, file their first accounts and leave this population, so treat them as an indication of scale and shape rather than exact values. Figures reflect our evaluation of the data available to us and are not a warranty of any individual company's condition.
Questions?
Contact your Customer Success representative, or write to us at contact@risika.com. We are also happy to go through your credit policy with you if you want the new scores built into it.