The factors considered by a credit rating agency

1. The factors considered by a credit rating
agency when a borrowing company applies for
rating.
Dr. I FRANCIS GNANASEKAR, M.Com., M.B.A., M.Phil, B.Ed., Ph.D
Associate Professor and Former Vice – Principal & HOD
PG and Research Department of Commerce
St. Joseph’s College (Autonomous)
Tiruchirappalli – 620 0022 October 2017 1

2. The Factors to be considered by credit rating
agency
 Business Analysis
 Evaluation of industrial risk
 Market position of the company within
the industry
 Operating efficiency of the company
 Legal position in terms of prospectus
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3. The Factors to be considered by credit rating
agency contd.,
 Financial analysis based on accounting
quality
 Statement of profits
 Earnings protections
 Cash flow and their adequacy
 Financial flexibility
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4. The Factors to be considered by credit rating
agency contd.,
 Track record of management
 Capacity to overcome adverse
situations
 Goals philosophy and strategy
 Labour turnover
 Regulatory and competitive
environment
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5. The Factors to be considered by credit rating
agency contd.,
 Asset quality
 Financial position
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