credit rating

Credit rating by banks differ from banks to bank. Banks follow on line credit rating on specified software or excel based software.

Marks are given on various factors ;

-Financial data i.e. Current ratio, DER, Profitability trend, sales achievement trend etc.

-Marketing data etc.

-Value of account etc.

If any enterprise get say 85% marks grading are made Like B,BB,BB+,A,AA,AA+  etc.

say on 85 % marks CREDIT RATING is A.

BASED ON CREDIT RATING BANK FIXES RISK FACTOR.

NO RISK,AVERAGE RISK.HIGH RISK ETC.

Based on A, Interest rated are fixed :

FOR CC LIMIT : BPLR-1%

FOR T/L : BPLR+.050%-15

ETC.

CMA A.K.ROY

Based on

Credit rating done by agencies take into account various parameters like promoter's background, their track record in other companies. Company's standing inthe industry, product, etc.