Credit Scoring Through Mathematical Modeling: Applying the Sherrod Approach to Solaria Tech (Morocco, 2023)

ABSTRACT: This study aims to analyze and assess the credit risk of Moroccan solar energy solutions company Solaria Tech, by applying the Sherrod mathematical model. An analytical descriptive approach based on digital simulation and real financial statements of the company for the year 2023, including the budget and results calculation tables, was adopted. The study used six key financial indicators (X1) to (X6) that represent the basic ratios adopted in the Sherrod model, such as the ratio of working capital, the ratio of liquid assets, net profit to assets, and others. The results of the analysis showed that the calculated value of the Z coefficient was 8.28, which indicates that the company falls into the third category according to the bank's classification, that is, it represents an average degree of credit risk, and the study also showed the company's good ability to generate profits and finance its fixed assets through equity, which enhances its credit confidence despite some limited liquidity indicators. The study concludes that it is important to use quantitative models such as Sherrod to support loan decisions and reduce financial risks, especially in vital sectors such as renewable energy.