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Inputs for synthetic rating estimation Spreadsheet

Inputs for synthetic rating estimation Spreadsheet

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Inputs for synthetic rating estimation Spreadsheet can be immediately |n|downloaded and opened on your computer using Microsoft Excel. Can be |n|modified to fit your needs or used as-is.|n||n|Click to|n||n|Preview.|n|Click Back to return.|n|
Inputs for synthetic rating estimation Spreadsheet can be immediately |n|downloaded and opened on your computer using Microsoft Excel. Can be |n|modified to fit your needs or used as-is.|n||n|Click to|n||n|Preview.|n|Click Back to return.|n|

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Published by: 4Expertise on Sep 27, 2010
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02/16/2011

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Sheet1

Page 1
Inputs for synthetic rating estimation
Enter the type of firm = 1 (Enter 1 if large manufacturing firm, 2 if smaller or riskier firm, 3 if financial service firm)
Enter current Earnings before interest an ta!es (E"#$) = 1%%%%
Enter current interest e!penses = 2%%%
Enter current long term government bon rate = &'%%(
Output
#nterest coverage ratio = 5.00
Estimate "on )ating = A
Estimate *efault Sprea = 1.00%
Estimate +ost of *ebt = 7.00%
For large manufacturing firms For financial service firms
If interest coverage ratio is If long term interest coverage ratio is
> ? to Rating is Spread is greater than
,1%%%%% %'2 * 1%'%%( ,1%%%%%
%'2 %'&- + .'-%( %'%-
%'&- %'/ ++ &'%%( %'1
%'/ 1'2- +++ -'%%( %'2
1'2- 1'- ", 0'2-( %'3
1'- 1'.- " 3'2-( %'0
1'.- 2 "1 2'-%( %'-
2 2'- "" 2'%%( %'&
2'- 3 """ 1'-%( %'/
3 0'2- 2, 1'2-( 1
0'2- -'- 2 1'%%( 1'-
-'- &'- 21 %'/%( 2
&'- /'- 22 %'-%( 2'-
/'-% 1%%%%% 222 %'2%( 3
For smaller and riskier firms
If interest coverage ratio is
greater than 3 to )ating is Sprea is
,1%%%%% %'- * 1%'%%(
%'- %'/ + .'-%(
%'/ 1'2- ++ &'%%(
1'2- 1'- +++ -'%%(
1'- 2 ", 0'2-(
2 2'- " 3'2-(
2'- 3 "1 2'-%(
3 3'- "" 2'%%(
3'- 0'- """ 1'-%(
0'- & 2, 1'2-(
& .'- 2 1'%%(
.'- 4'- 21 %'/%(
4'- 12'- 22 %'-%(
12'- 1%%%%% 222 %'2%(
Sheet1
Page 2
(Enter 1 if large manufacturing firm, 2 if smaller or riskier firm, 3 if financial service firm)
(2 back only long term interest e!pense for financial firms)
(5se only long term interest e!pense for financial firms)
For financial service firms
If long term interest coverage ratio is
3 to )ating is Sprea is 6perating #ncome *ecline
%'%- * 1%'%%( ,-%'%%(
%'1 + .'-%( ,0%'%%(
%'2 ++ &'%%( ,0%'%%(
%'3 +++ -'%%( ,0%'%%(
%'0 ", 0'2-( ,2-'%%(
%'- " 3'2-( ,2%'%%(
%'& "1 2'-%( ,2%'%%(
%'/ "" 2'%%( ,2%'%%(
1 """ 1'-%( ,2%'%%(
1'- 2, 1'2-( ,1.'-%(
2 2 1'%%( ,1-'%%(
2'- 21 %'/%( ,1%'%%(
3 22 %'-%( ,-'%%(
1%%%%% 222 %'2%( %'%%(

00% 7.00% -40.4 B0.05 D 0.00% 0.20% 0.00% 4.00% 6.25% -20.Sheet1 irm.80% -10.00% 1.00% 5.3 CCC 0.6 B+ 0.50% -5.00% Page 2 .50% -20.25% -25.00% 0.00% 1.5 A2 A 2.00% -50.5 A+ 3 AA 100000 AAA Spread is Operating Income Decline 10.00% -20.25% -17.00% -15.00% -40.2 CC 0.00% 2.1 C 0.00% 0.8 BB 1 BBB 1.50% 1.00% 3. 2 if smaller or riskier firm.50% -20. 3 if financial service firm) (Add back only long term interest expense for financial firms) (Use only long term interest expense for financial firms) r financial service firms ong term interest coverage ratio is ? to Rating is 0.50% -40.00% 2.5 B 0.

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