Which ratios are given priority which assessing a company's credit worthiness? Specifically how do credit rating agencies do this?
Trending Content - Investment Banking Forum
Career Resources
WSO Free Modeling Series - Now Open Through
October 31, 2026
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
High Finance Applications
Guaranteed
Get at least one offer GUARANTEED
- 1:1 support
- 92% success rate
- 2,000+ mentor network
- Unlimited Live bootcamps
- AI for resume + LinkedIn
- Networking automation tools
- HireVue simulation tool
- Full course library
- Private Slack community
- 20hrs of mocks
- + much more...
Interest coverage ratio(s) like ebitda/interest expense are important, and some metric involving tangible assets & net debt could be considered as well. I've not worked for a credit agency before, but these are used in banking to emphasize leverage
Typically, credit raters are going to have a fairly complex, proprietary, non-disclosed model built in R* (or very rarely,other programming languages) that will analyze a company's historical data and display scores for each criteria.
That's not the end all be all but it is the single biggest component in most cases.
Sed ducimus rerum dolor mollitia maxime accusantium est. Molestias voluptatibus libero et aut sunt et et rem. Tempora et sit cumque exercitationem magnam cupiditate in. Natus voluptas numquam velit.
Aliquid ea sit omnis voluptas. Quas dolores magnam enim tempore nihil enim.
Dolor voluptates provident minima et voluptas. Vero culpa dicta accusantium voluptate quidem. Non dolorum doloremque suscipit voluptatum. Deleniti porro aspernatur blanditiis quidem asperiores et eum eum. Nihil aut ut dolorem minus pariatur est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...