Infomerics Valuation & Rating Interview Questions, Process, and Tips

Credit rating is given based on the company's financial health, industry trends, and management quality.

• Analyze financial statements and ratios to determine the company's ability to repay debt

• Consider industry trends and competition to assess the company's market position

• Evaluate management quality and corporate governance practices

• Assign a rating based on the above factors, using a standardized rating scale

• Example: A ...read more

Credit rating is an assessment of the creditworthiness of an individual, company, or government, indicating the likelihood of default.

• Credit rating is a measure of the borrower's ability to repay debt.

• It helps investors and lenders make informed decisions about lending money or investing in a particular entity.

• Credit ratings are assigned by credit rating agencies based on various factors such as financial stability, pa...read more

Tangible Net worth is the value of a company's assets minus its liabilities, excluding intangible assets.

• Tangible Net worth = Total Assets - Total Liabilities

• It represents the net value of a company's physical assets after deducting its debts.

• Intangible assets like patents, trademarks, and goodwill are not included in the calculation.

• Tangible Net worth is important for assessing a company's financial health and solvenc...read more

DSCR stands for Debt Service Coverage Ratio and ISCR stands for Interest Service Coverage Ratio. They are financial ratios used to assess the ability of a borrower to meet their debt obligations.

• DSCR measures the cash flow available to cover debt payments, while ISCR measures the cash flow available to cover interest payments.

• Both ratios are important for lenders and investors to evaluate the creditworthiness and risk ...read more

Rating methodology varies across sectors and criteria, using a standardized rating scale.

• Each sector has its own unique rating methodology and criteria

• Rating agencies use a standardized rating scale to rate entities within a sector

• For example, in the financial sector, rating criteria may include financial strength and creditworthiness

• In the healthcare sector, rating criteria may include patient outcomes and quality of ...read more

Basel norms are a set of international banking regulations that aim to ensure financial stability.

• Basel norms were first introduced in 1988 and have been updated several times since then.

• The norms require banks to maintain a minimum level of capital adequacy to cover their risks.

• The norms also set out guidelines for risk management and supervision.

• Basel III, the latest version of the norms, was introduced in response t...read more

Credit rating process evaluates creditworthiness of an entity based on its financial history and future prospects.

• Credit rating agencies analyze financial statements, industry trends, and economic conditions to assign a credit rating to an entity.

• Credit ratings range from AAA (highest creditworthiness) to D (default).

• Credit ratings help investors and lenders make informed decisions about the risk associated with invest...read more