Financial Health Ratings
FHRs™ are our proprietary, predictive and comprehensive measure of the true financial health of a company. FHRs™ are geared to identify a company's ability to remain competitive in future environments against its global industry peer group. The FHR™ is based upon robust and adaptive models that combine extensive financial ratio analyses with nonlinear modeling techniques without market pricing inputs.
FHRs™ are the product of the automated econometric analysis of 62 efficiency ratios (input in the denominator and output in the numerator) that examines how effectively a firm uses its resources. Having mapped each of the 62 global distributions as a performance curve that runs from 0 to 100, the FHR™ system compares each company to our proprietary dataset of over 300,000 companies with over 30 years of history.
FHRs™ have none of the numerous biases or conflicts of the large credit rating agencies. They are early and insightful and also timely and actionable by credit and equity market professionals.
Rapid Ratings™ develops many value-added products from the FHR™ system to suit the needs of different types of investors, lenders, traders, consultants/advisers, regulators etc. These products allow users to generate Alpha (identifying improvement, distress and turnaround situations earlier than the market) and to manage risk exposures (leading S&P and Moody's ratings downgrades by years and often share price, credit default swaps and bond spreads).
General Motors Case Study 
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FHRs™ are the product of the automated econometric analysis of 62 efficiency ratios (input in the denominator and output in the numerator) that examines how effectively a firm uses its resources. Having mapped each of the 62 global distributions as a performance curve that runs from 0 to 100, the FHR™ system compares each company to our proprietary dataset of over 300,000 companies with over 30 years of history.
FHRs™ have none of the numerous biases or conflicts of the large credit rating agencies. They are early and insightful and also timely and actionable by credit and equity market professionals.
Rapid Ratings™ develops many value-added products from the FHR™ system to suit the needs of different types of investors, lenders, traders, consultants/advisers, regulators etc. These products allow users to generate Alpha (identifying improvement, distress and turnaround situations earlier than the market) and to manage risk exposures (leading S&P and Moody's ratings downgrades by years and often share price, credit default swaps and bond spreads).
Dana Corp.: FHR vs. S&P and Moody's Ratings Trends |
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| Dana Corporation represents an example of Rapid Ratings' timely, realistic ratings in contrast to late responses by the major rating agencies. We saw Dana as a high risk credit when S&P saw investment grade and Moody's Ba2, just a little over one year before default. We saw Dana as a deeply distressed three months before default, while the Agencies were at B1/B+. Without question, Rapid Ratings provided critical early warning. Moody's and S&P are the trademarks of their respective companies. |
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