Rapid Ratings International Implements Enhanced Product Features
July 21, 2015
Rapid Ratings International (RRI), a leading independent ratings, research and analytics firm, today announced the enhancement of its Financial Health Rating (FHR®) to provide greater insight into near term probability of default. The FHR is a quantitative 0-100 measure of a company’s financial health that rates public and private companies on the same basis globally.
RRI’s enhancement expands the proven methodology of the FHR that focuses on financial health over the next 2-3 years with further evaluation of 11 ‘Resilience Indicators,’ ratios that lend insight into the probability of default over the next 12 months. The result is a multivariate statistical classification system that far exceeds traditional models and methods for identifying default risk. In line with RRI’s consistent philosophy, the enhanced FHR only uses information from a firm’s financial statements, allowing swift and objective, analysis of both publicly traded and privately held firms. RRI will continue to report the Core Health Score, the original FHR, as it remains an invaluable tool for assessing a company’s proximity to success or failure as well as report on the enhanced FHR.
“This enhancement is another example of our continued effort to innovate and improve what we do to add more value to our clients who rely on our ratings every day for critical decision making,” said James H. Gellert, CEO of RRI. “As counterparty risk management becomes ever more important, we will continue to release and provide solutions for greater insight into assessing risk.”
The FHR has a strong track record for providing advanced notice on a company’s deterioration and is consistently more accurate than traditional credit ratings, default models and payment history based scoring systems. In contrast to other products, RRI utilizes an un-conflicted, quantitative system to rate the financial health of corporations and financial institutions. The result is an assessment that predicts the long-term stability of a company, regardless of size, industry, or geographic location.
The updated FHR is the result of extensive econometric analysis on thousands of entities historically rated with weak Core Health. RRI understands what characteristics differentiate weak, but resilient companies from those with the highest immediate risk of failure, and have incorporated this research into yet another high value analytical tool.
About Rapid Ratings International
Rapid Ratings International (RRI) is a quantitative ratings and research firm that enables companies to most effectively assess the financial health of their global public and private counterparties, including their customers, suppliers and vendors, trading counterparties, and investments. The firm’s solutions are fully scalable and have been proven to identify distress situations earlier than its competitors. Their measurements are the only to rate public and private companies globally on the same basis, giving clients the ability to assess any company with the same depth of analysis.
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