What is 'CEQ factor' in SAP IS-B-RA-CL - Default Risk and Limit System?

CEQ factor - Overview

• Component: IS-B-RA-CL

• Component Name: Default Risk and Limit System

• Description: Credit equivalent factor Categorizes an adjustment value that describes the rescheduling frequency of a product.

CEQ factor - Details

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  Key Concepts: 
  CEQ factor stands for Credit Exposure Quality factor and is a component of the IS-B-RA-CL Default Risk and Limit System. It is used to measure the creditworthiness of a customer or counterparty. The CEQ factor is calculated based on the customer's credit rating, payment history, and other financial information. 
  
  How to use it: 
  The CEQ factor is used to determine the risk associated with a customer or counterparty. It is used to set limits on the amount of credit that can be extended to a customer or counterparty. The higher the CEQ factor, the lower the risk associated with the customer or counterparty. 
  
  Tips & Tricks: 
  When setting limits on credit extended to customers or counterparties, it is important to consider both the CEQ factor and other factors such as the customer's payment history and financial information. This will help ensure that the risk associated with extending credit is minimized. 
  
  Related Information: 
  The CEQ factor is just one component of the IS-B-RA-CL Default Risk and Limit System. Other components include credit ratings, payment history, and financial information. It is important to consider all of these components when setting limits on credit extended to customers or counterparties.