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Two dominant
US
agencies - S&P and Moody's Investors Service.
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Analysis starts with country risk assessment:
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political stability;
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overall economic prospects.
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Then an assessment of the industry, which
places an upper limit on the rating potential.
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Industry risk ratings are better for:
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industries which maintain profit margins in
recession;
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industries with flexibility in timing and magnitude of capital
outlays eg pharmaceuticals, publishers.
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Industry risk
assessment sets the stage for deeper analysis of the company - includes
assessment of management quality as well as financial ratios. |
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