The document outlines Credit Ratings Methodology, which involves analyzing both business risk profile and financial risk profile. The business risk profile analysis examines factors like industry trends, competitive forces, and company position, while the financial risk profile analysis evaluates liquidity, cash flow adequacy, accounting practices, and governance risk. Credit ratings help investors and companies by assessing the creditworthiness and risk of default for issuers and their securities.

1. Credit Ratings Methodology

2. Credit Ratings
Methodology
Business
Risk Profile
Analysis
Financial
Risk Profile
Analysis

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Validation of “Company
Position”
Trends
Quality of Earnings
& Analytical adjustments
Peer Group Comparisons
Profitability
/ Peer Group
Comparisons
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Competitive Factors
Market position
Keys to Success
Size
Diversification
Management
Country
Risk
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Political
Economic
Industry – Specific factors
Foreign exchange
Industry
Factors
Business
Risk
Company
Position
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Industry Trends
Industry Structure
Market Size
Growth Potential
Cyclicality
Bases of Competition
Changing Technology
Operating Risk
Regulatory Environment

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Operating sources & uses
Of liquidity
Other potential calls on
Liquidity
Debt Characteristics
Bank credit facilities
Liquidity /
Short-term
Factors
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Focus on debt
service capability
Analytical distinctions with
profitability
Cash flow measures /
ratios
Accounting
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Governance
Risk
Financial
Risk
Cash Flow
Adequacy
Accounting Regime
Reporting & Disclosure
Analytical adjustments
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Ownership
Board of directors
Management practices
Financial Strategy
Risk Tolerance
Accounting Practices
Internal controls

5. CRISIL(CREDIT RATING AND
INFORMATION SERVICES OF INDIA
LTD.)
A global analytical company
 Incorporated in year 1987
 Provides ratings research and policy advisory
services
 So far crisil has 30000 debt instruments covering
the entire debt market
