Rating Corporations

Resilient and less complex corporations are not only prepared to face the volatility and turbulence of markets, they are also more governable, more efficient and generally more profitable and sustainable.

Universal Ratings provides Resistance to Shocks ratings and business complexity measures based on the following quarterly fundamentals:

  • Income Statement

  • Balance Sheet

  • Cash Flow

  • Ratios

  • Earnings

  • Multiples

As an example, the Resistance to Shocks rating of a large tech company, based on 12 quarterly Standardized Balance statements is illustrated below (data source:Bloomberg). The analysis has been performed with our BLOOMBERG APP:

Resistance to Shocks (%): 75.2

RtS Rating (1-5): 3-star

Relative Complexity (%): 66%

NB. When relative complexity approaches values close to 100%, the business is dominated by uncertainty, hence fragile and difficult to govern.

The business Complexity Profile, which ranks Balance Sheet entries in terms of how each one impacts business complexity and Resistance to Shocks, is illustrated below.

In order to alter the complexity and Resistance to Shocks of a business it is necessary to work with the entries at the top of the above chart. Enries close to the bottom of the chart may, however, impact performance but not complexity and/or Resistance to Rhocks.

 

Download example of RtS Rating report of major companies listed on the S&P, Dow and the NASDAQ.