CONSULTING IS A MATTER OF TRUST

Rating

In finance, rating is the ordinal scaled rating of the creditworthiness of an economic entity (company, state) or financial instrument. The classification is usually carried out by a rating agency or a credit institution. The rating is defined as both the procedure for determining the creditworthiness level and its result. The scale of the sovereign credit ratings is also referred to as the "rating scale", the agreed credit rating abbreviations as the "rating code".

Tailor-made financing is an essential pre-requisite for investment in fixed assets or expansion. Qualification as a rating analyst, practical experience in this area, and design and successful negotiation with lenders, such as banks, is one of our strengths that we would like to use for your benefit.

A rating advisor is a consultant who prepares a company for a rating, be it through the bank or an external rating agency. However, the rating advisor does not subsequently compile the company's rating. Conversely, a rating agency or a bank cannot meaningfully help with the preparation or optimization of the rating of a company without losing the necessary independence.

A rating advisor, together with the company, first clarifies which benefits the rating should generate and supports the selection process. The rating agency must be "at home" in the industry to which the company being advised belongs. Industry comparisons are compiled and industry knowledge is mandatory. Subsequently, the rating advisor critically examines the criteria of a company that are particularly important for the rating, based on its knowledge of standard rating procedures.

The point is the Rating Advisory, which is how to prepare the company for the rating itself. This brings him to a first estimate of how good the rating of a company will be. Many of the measures we have developed to improve the rating have the following as a positive side effect: eliminating company weaknesses completely independent of the rating, expanding competitive advantages and improving the company value and the long-term future prospects. In this regard, a rating advisory process is more than a necessary evil to secure credit leeway and credit lines. It inevitably offers diverse ideas and serves to strengthen the company.

The creditworthiness check by credit institutions is based on data based on facts that are undiscountable, such as: Data from the annual financial statements, financial circumstances, etc. For the purpose of rating, the personal creditworthiness of the entrepreneur and the markets or industry in which the company operates are also included in the decision.

On average, it is generally assumed that these so-called soft facts (approx. 30%) and hard facts (approx. 70%) are included in the rating. Due to complex mathematical procedures, the individual factors are weighted differently. Depending on the coincidence of different individual factors, the computer-aided rating systems calculate the rating grade.

Soft Facts (qualitativ)
  • Industry / Market / Competition
  • Management
  • Customers

 

Hard Facts (quantitativ)
  • Financial policy
  • Cash flow generation
  • Capital structure / debt
  • Strategy / Company

Due to the high weighting within the overall rating, it is necessary to obtain a positive rating in the area of soft factors, which is assessed independently of business figures or development. As a result, you can either position yourself even better than by the hard factors alone or - which will probably be the case more often in the current situation - to make the rating grade still reasonably attractive.

But no matter whether hard or soft facts, in both cases we can provide you with competent advice based on many years of experience and practice.