Rating Ratios

This screen presents a number of ratios that are used by financial institutes for the rating of businesses and for the decision making concerning their credit terms. The ratios and their formulas are explained in more details in the German help and in the User's Manual.

If Previous Periods have been defined in the General screen, then they are displayed here before the first plan period.

The screen is also used to display the Survival Ratio (based on the Altman's Z Score model) which is one of the most reliable ratios for analyzing the business ability to remain an on- going concern. The Survival Ratio ranks the business short-term stability as follows:

Unstable (Red) - The business is unstable. There is serious doubt if it will remain an on-going concern for long. Range: Bellow 1.23

Stable (Black) - The business is OK. There is no indication of a financial catastrophe in the near future. Range: Above 1.23 Bellow 2.90

High Stability (Green) - The business's financial state is very stable (usually above the industry averages). Range: Above 2.90

Φ Note: You can edit the default ranges changing it according to your requirements.

The Formula

Survival Ratio = 3.107[A] + 0.847[B] + 0.420[C] + 0.717[D] + 0.998[E]

Where:

A = [Op. Profit/ Assets]

B = [Retained Earnings / Assets]

C = [Equity / Debt]

D = [Working Capital / Assets]

E = [Revenues / Assets]

The screen shows the above ratios that are used to calculate the survival ratio and the survival ratio itself.

Toolbar Buttons

The toolbar includes the following buttons:

OK - Close screen (and save all changes if applicable)

Print Table - Create a report for the current table, showing it on the print preview screen

Display Options - Arrange the screen in different arrangements: display table with graph or just one of them.

Export to MS Excel file - Exports the displayed table to MS Excel