ReadyRatios Software Manual
- Introduction (2)
- Input Tables (7)
- Database and Reports Archive (2)
- Settings (4)
- Statistics (2)
- Tutorial (1)
Rating of Financial Condition
ReadyRatios has a unique method of ranking the financial position of the companies analyzed. This allows any user to obtain an objective assessment of the financial status, independent of the analyst's opinion. At the same time, the user can customize the ranking procedure by changing the formulas and qualitative assessments of the indicators used to evaluate the performance (see "Settings" - "Formulas customization"). A generalized (integral) assessment of the company's financial situation consists of an evaluation of its financial position and financial performance. In this case the following scale is used:
|Score||Conventional Symbol (rating)||Qualitative Assessment of Financial Condition|
Rating "AAA" - "AA" indicates the excellent (very good) financial position of the company, its ability to meet its obligations in the short term (based on the precautionary principle) and possibly in the long term. Such companies are considered reliable borrowers with a high degree of creditworthiness.
Rating "A" - "BBB" indicates the good (positive) financial position of the company, its ability to meet its obligations in the short term (based on the precautionary principle). Companies with this rating belong to the category of borrowers with a high probability of obtaining credit resources (good creditworthiness).
Rating "BB" - "B" represents the normal (satisfactory) financial condition of a company, when most of the indicators fall within the norm. Companies with this rating can be considered as counterparties with whom a prudent risk management approach should be adopted. Such companies may qualify for credit resources, but the decision depends largely on the analysis of additional factors (neutral creditworthiness).
Rating "CCC" - "CC" indicates the unsatisfactory (poor) financial status of the company, when, as a rule, the financial indicators do not fall within the norm. The reasons for this may be objective (mobilization of resources for realization of large projects, large transactions, general downturn or crisis in the economy of the country or industry, etc.) or the result of inefficient management. In order to obtain credit resources, these companies may have to provide reliable money-back guarantees that do not depend on the financial situation of the company or the results of the company's future performance (low creditworthiness).
Rating "C" - "D" indicates very poor or critical condition of the company. Most financial indicators are significantly worse than the norm. Companies with a "D" rating are highly likely to cease operations in the short term (probability of default).Up
Summary of Statistics by Rating Financial Condition
In the "Statistics" section of ReadyRatios, there is a summary table with information about the number of records provided according to which a certain financial status rating is assigned to the company, taking into account only the reports currently stored in the Report Archive.