The distance credit risk measure, just like the taxonomic measure, is the value that incorporates the impact of all variables (financial and economic ratios) on the standing of local self-government units. At the same time, contrary to the taxonomic risk measure, it is structured in two stages. In the first step we calculate values of a partial ratio independently for each variable, by comparing the value of that variable for a given self-government unit to two threshold values. The first is the most desirable value (the maximum threshold) considering the condition of self-government units. The other is the least desirable value (the minimum threshold) considering the condition of self-government units.

Ultimately, the value of group risk measures and the composite risk measure is obtained by calculating arithmetic averages of the respective partial ratios. For group risk measures, these are exclusively the partial ratios for variables that describe respective areas. The structure of the composite credit risk measure aggregates all partial ratios. Due to the appropriate structuring, both group risk measures and the composite risk measure are always within the range of [0;1].