International Corporate Finance - Impact of financial ratios on long term credit ratings Using the automotive examples of BMW Group, Daimler Group and Ford Motor Company
-
- Taschenbuch
- eBook ausgewählt
-
Form:Einzelkauf Download
-
Sprache:Englisch
Fr. 37.90
inkl. gesetzl. MwSt.Beschreibung
Produktdetails
Format
Kopierschutz
Nein
Family Sharing
Nein
Text-to-Speech
Nein
Erscheinungsdatum
01.12.2010
Verlag
GRINSeitenzahl
95 (Printausgabe)
Dateigröße
1381 KB
Auflage
1. Auflage
Sprache
Englisch
EAN
9783640766086
Master's Thesis from the year 2010 in the subject Business economics - Investment and Finance, grade: 2,0, Reutlingen University (Business Adminstration), language: English, abstract: The global financial and economic crises resulted for many corporations in a downgraded credit rating within the last 2 to 3 years. Even a large percentage of them defaulted on their credit obligations due to inherent operational factors. The importance of credit ratings will play an even more central role under the currently discussed New Basel Capital Accord (Basel III) (Standard & Poor¿s 2010; Basel III For Global Banks).
The purpose of this research is to explore the relationship between long term credit ratings and selected financial ratios that can be derived by public information. Such information can be very valuable for companies in order to have a slight control over their credit rating obtained by rating agencies as well as in negotiations with banks and other outside creditors.
The research design is based on three automotive manufacturers and involves their credit rating over the last decade. The data for the financial ratios was collected from respective financial statements.
The study is based on a correlation and multiple regression analysis using the MINITAB (Minitab Data Analysis Software, Pennsylvania USA) software as a statistical platform. A step wise approach determined the regression equation with the highest significance. The equations were used to detect those variables that have the strongest impact on the credit rating.
The results for automotive companies with a solid statistical data set are surprisingly high in significance with an adjusted coefficient of determination of over 90%. Overall it is not feasible to mention which one of the seventeen financial ratios explains the variation in credit rating most reliable, because such a statement depends always on the individual company. For example to explain the changes in the rating for the Ford Motor Company, the following six ratios turned out to be the most significant ones: total equity to total assets; sales to fixed assets; sales to inventory; net income to total equity; total equity to long term liabilities and EBIT to sales.
Each regression equation consisted mostly of different financial ratios. Apart from the fact that financial information is only one aspect of the credit rating determination process, the attained results are valid and valuable insights for all external and internal rating analysts.
The global financial and economic crises resulted for many corporations in a downgraded credit rating within the last 2 to 3 years. [...]
The purpose of this research is to explore the relationship between long term credit ratings and selected financial ratios that can be derived by public information. Such information can be very valuable for companies in order to have a slight control over their credit rating obtained by rating agencies as well as in negotiations with banks and other outside creditors.
The research design is based on three automotive manufacturers and involves their credit rating over the last decade. The data for the financial ratios was collected from respective financial statements.
The study is based on a correlation and multiple regression analysis using the MINITAB (Minitab Data Analysis Software, Pennsylvania USA) software as a statistical platform. A step wise approach determined the regression equation with the highest significance. The equations were used to detect those variables that have the strongest impact on the credit rating.
The results for automotive companies with a solid statistical data set are surprisingly high in significance with an adjusted coefficient of determination of over 90%. Overall it is not feasible to mention which one of the seventeen financial ratios explains the variation in credit rating most reliable, because such a statement depends always on the individual company. For example to explain the changes in the rating for the Ford Motor Company, the following six ratios turned out to be the most significant ones: total equity to total assets; sales to fixed assets; sales to inventory; net income to total equity; total equity to long term liabilities and EBIT to sales.
Each regression equation consisted mostly of different financial ratios. Apart from the fact that financial information is only one aspect of the credit rating determination process, the attained results are valid and valuable insights for all external and internal rating analysts.
The global financial and economic crises resulted for many corporations in a downgraded credit rating within the last 2 to 3 years. [...]
Noch keine Bewertungen vorhanden
Verfassen Sie die erste Bewertung zu diesem Artikel
Helfen Sie anderen Kundinnen und Kunden durch Ihre Meinung.